A history of homebrewed alcohol in Nairobi

A large plot of houses made of tin, with rubbish on the ground in front of them
Houses in Mathare, via Wikipedia

I’ve written previously about the challenges of accessing justice, clean water, and other basic services in Nairobi’s Mathare neighborhood.  Now another insightful article about the area has come out, with Antony Adoyo, Jackob Omondi, Juliet Wanjira, and Naomi van Stapele’s account at Elephant of the critical role that homebrewed alcohol (or chang’aa) plays in the local economy.

The roots of the chang’aa economy go back to the colonial era.

 As early as the 1930s, women who settled in abandoned parts of the quarry that later came to be known as Mathare earned money through sex work and selling home-brewed alcohol such as busaa and chang’aa. The colonial capital Nairobi only allowed a limited number of ‘native’ bachelors living in designated housing facilities. This area was also wedged in by the Royal Airforce Eastleigh Base (currently known as Moi Air Base), an askari barrack, and a transit camp for the Kings African Rifles.

These women were among the many young people who were forced to leave their increasingly overcrowded homesteads in the ‘Native Reserves’ in the pre-WWII colonial period in search of work for cash to pay for hut tax, among other things. Even if women comprised the majority of residents in Mathare from the onset, men also increasingly came to live here. During the late 1930s, many of the rural-urban migrants also came from other illegalized squatter communities in the Rift Valley, where former farm workers had been displaced from European farms as a result of the gradual mechanization of farm work.

After independence in 1963, chang’aa distilling continued on a smaller scale.  Then the rapid urbanization of the 1990s caused it to expand:

It was not until the late 1980s and early 1990s that parts of Mathare gradually became the epicenter of the largescale production and distribution in Nairobi of chang’aa. According to several bar owners we spoke with, the influx of rural-urban migrants during this period boosted the selling of chang’aa to unprecedented levels. Demographic records and academic estimates vary greatly but it is safe to say that the population in Mathare rose from a few thousand during the colonial era to many tens of thousands between the 1960s and 1980s.

Today, the chang’aa distillers are regularly shaken down by the police for bribes, and risk having their equipment destroyed if they don’t pay up.  (Manufacturing chang’aa is legal, although basic sanitary standards must be met.  The penalty for not meeting them is supposed to be a fine rather than destruction of equipment.)

Shosho Kingi has distilled and sold alcohol for more than four decades and has raised her children, grandchildren and great-grandchildren while doing so. The police had poured her kangara, the distilling mixture, which had been almost ready for cooking. Subsequently, she had lost 4500 shillings [US$45], her monthly earnings, and was left seriously in debt. Thousands of small business owners and their employees and tens of thousands of their dependents suffered the same fate. On Monday, all the jiko’s (‘kitchens’) near the river remained closed; no one could work while the police patrolled in search of alcohol and production tools to destroy.

There are very few other livelihood options in Mathare, which makes the regulation of chang’aa a serious economic issue for the area.

Are M-Pesa’s poverty reduction powers overstated?

A Kenyan woman stands in front of a green kiosk with the word MPesa prominently painted on it

Photo via Fiona Graham / World Remit

There’s been a bit of a stir on Kenyan Twitter lately about a new (and ungated) Review of African Political Economy article by Milford Bateman, Maren Duvendack, and Nicholas Loubere.  In it, they take on Tavneet Suri and William Jack’s claim in Science that the M-Pesa mobile money platform has led to reductions in poverty in Kenya by making it easier for people to access remittances from family and friends, and consequently giving them more money to start small businesses.

Writing at Developing Economics, Bateman et al. argue that Suri & Jack’s argument falls short in several ways.  First, informal microenterprises are rarely profitable.  In addition, there’s a question of general equilibrium effects:

Some of the purported gains made by M-Pesa clients inevitably come at the expense of existing microenterpriseswhich will contract, lose income, and possibly close. Moreover, the influx of new microenterprises has undoubtedly had negative knock-on effects for entire local economies, driving down already tiny profit margins and exacerbating hypercompetitive markets dominated by the poor acting as producers.

Second, M-Pesa facilitates not just remittances, but also borrowing.  More than 25% of Kenyans have taken out a loan through one of the many mobile money borrowing facilities available, and about half of those borrowers have struggled to make payments on time, according to a CGAP report.  There’s an implicit argument here that trapping poor people in debt is unethical, although it’s not obvious to me that cutting poor people off from credit is ethical either.

Third, Bateman et al. also question Suri & Jack’s methods, suggesting that the observed increased in wealth in areas with more M-Pesa agents is driven by clustering of agents in wealthier areas, rather than changes facilitated by access to M-Pesa.  I’m not as convinced by this.  Suri & Jack used panel data from 2008 – 2014 to measure the impact of M-Pesa expansion up until 2010.  They picked this cutoff date for M-Pesa because the distribution of agents up till that point (but not afterwards) wasn’t strongly correlated with local income levels.

My take on all of this is that I don’t think Suri & Jack have fundamentally misunderstood the economic effects of M-Pesa expansion.  However, I think the point about general equilibrium effects is an important one, and one that’s generally underdiscussed in the literature on microfinance and microenterprises.

Interesting academic articles for June 2019

Here are the articles I’m looking forward to reading!  Also, out of consideration for the many people who don’t have access to gated academic journals, I’m switching to a policy of only sharing articles which have ungated editions available online, whether as working papers or through Sci-Hub.

Lachlan McNamee.  2019.  “Indirect colonial rule and the salience of ethnicity.”  World Development.

Why is ethnicity more salient in some contexts than in others? This paper provides new theory and evidence linking indirect colonial rule to the contemporary salience of ethnicity in sub-Saharan Africa. Using Afrobarometer survey data, I establish a substantively significant cross-national relationship between the indirectness of colonial rule and the strength of contemporary ethnic identification in sub-Saharan Africa. To show that this relationship is causal, I then exploit a sub-national research design leveraging regional variation in direct and indirect colonial rule across the country of Namibia. I show that, controlling for location and ethnicity, indirect colonial rule is also associated with stronger ethnic identification within Namibia both across the country as a whole and within 50 km of the border dividing indirectly and directly ruled areas of Namibia. This paper then disentangles why indirect rule is so robustly associated with the salience of ethnicity. I theorize and provide evidence that the effects of indirect rule can be attributed to the greater importance of traditional leaders and ethnically demarcated customary land rights in formerly indirectly ruled areas. As such, this paper helps uncover the causes of important regional variation in the salience of ethnicity, advances our understanding of the institutional origins of ethnic conflict in parts of sub-Saharan Africa, and thus why indirect colonial rule is so often associated with poor developmental outcomes.

Zora Kovacic, Josephine Kaviti Musango, Lorraine Amollo Ambole, Kareem Buyana, Suzanne Smit, Christer Anditi, Baraka Mwau, Madara Ogot, Shuaib Lwasa, Alan C. Brent, Gloria Nsangi, and Hakimu Sseviiri.  2019.  “Interrogating differences: A comparative analysis of Africa’s informal settlements.”  World Development.

Urban development in Africa is a very diverse and ambivalent phenomenon with aspects that do not fall neatly into global standards. Informal settlements therefore challenge governance by standards. We argue that quantifying and interrogating differences offers a better basis for governance. By drawing on a comparative analysis of three different informal settlements in Sub-Saharan Africa, this paper explores what differences reveal about the governance of informal settlements. The paper uses an urban societal metabolism approach, focussed on gender, energy and health, based on questionnaires and focus group discussions in Enkanini (Stellenbosch, South Africa), Mathare (Nairobi, Kenya), and Kasubi-Kawaala (Kampala, Uganda). The contribution of the paper is both empirical and theoretical. Empirically, we provide new evidence about the metabolism of urban informality at multiple levels of analysis: the individual, the household and the settlement. Findings show the gender asymmetries in urban poverty and the intricate links between energy choices, health and economic status. Theoretically, we argue that different levels of analysis produce different understandings of urban informality, and that analyzing informal settlements only by population aggregates means missing information. We conclude by arguing that understanding differences leads to the formulation of modest and localised goals, which are better able to take into account the complexity of urban informality.

Henry B. Lovejoy, Paul E. Lovejoy, Walter Hawthorne, Edward A. Alpers, Mariana Candido, Matthew S. Hopper.  2019.  “Redefining African Regions for Linking Open-Source Data.” History in Africa.  

In recent years, an increasing number of online archival databases of primary sources related to the history of the African diaspora and slavery have become freely and readily accessible for scholarly and public consumption. This proliferation of digital projects and databases presents a number of challenges related to aggregating data geographically according to the movement of people in and out of Africa across time and space. As a requirement to linking data of open-source digital projects, it has become necessary to delimit the entire continent of precolonial Africa during the era of the slave trade into broad regions and sub-regions that can allow the grouping of data effectively and meaningfully.

Sam Hickey.  2019.  “The politics of state capacity and development in Africa: Reframing and researching ‘pockets of effectiveness.”  Effective States in International Development working paper 117.

The role of bureaucratic ‘pockets of effectiveness’ (PoEs) in driving development is generating renewed interest within development studies and, to an extent, development policy. Existing research on PoEs emphasises that politics plays a leading role in shaping the emergence and sustainability of high-performing public sector organisations. However, the field as yet lacks a clear sense of the conditions under which this happens, partly because of a tendency to see PoEs as ‘islands’ that are divorced from their political context, and partly because there has been no attempt as yet to undertake systematic comparative analysis of PoEs across different types of political context. This paper sets out the conceptual and methodological underpinnings of a new project that seeks to address these problems within the context of sub-Saharan Africa. Drawing on an alignment of political settlements analysis with critical theories of state power and African politics, the paper argues that PoEs are both shaped by, and help to reproduce, particular forms of politics and institutions in sub-Saharan Africa. This means that PoEs are not simply interesting objects of enquiry in and of themselves, but also because they can reveal a good deal about how the competing logics of regime survival, state-building and democratisation are playing out in Africa and what implications this has for development. The paper proposes a methodological approach for identifying and exploring PoEs and briefly summarises the results of the expert surveys that we undertook in our four initial countries, namely Ghana, Rwanda, Uganda and Zambia, which were chosen to represent different types of political settlement. These surveys resulted in our project focusing mainly on the economic technocracy as the key domain within which PoEs have flourished, particularly in terms of ministries of finance, central banks and revenue authorities, along with some other interesting outliers and underlying processes of state-building. Further papers from this project will include in-depth case studies of these specific PoEs and processes in each country, synthesised country analyses and comparative overviews.

Andrej Kokkonen and Anders Sundell.  2019.  “Leader Succession and Civil War.”  Comparative Political Studies.  

Leadership succession is a perennial source of instability in autocratic regimes. Despite this, it has remained a curiously understudied phenomenon in political science. In this article, we compile a novel and comprehensive dataset on civil war in Europe and combine it with data on the fate of monarchs in 28 states over 800 years to investigate how autocratic succession affected the risk of civil war. Exploiting the natural deaths of monarchs to identify exogenous variation in successions, we find that successions substantially increased the risk of civil war. The risk of succession wars could, however, be mitigated by hereditary succession arrangements (i.e., primogeniture— the principle of letting the oldest son inherit the throne). When hereditary monarchies replaced elective monarchies in Europe, succession wars declined drastically. Our results point to the importance of the succession, and the institutions governing it, for political stability in autocratic regimes.

Adrien Bouguen, Yue Huang, Michael Kremer, and Edward Miguel.  2019.  “Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics.”  Annual Review of Economics.

We assess evidence from randomized controlled trials (RCTs) on long-run economic productivity and living standards in poor countries. We first document that several studies estimate large positive long-run impacts, but that relatively few existing RCTs have been evaluated over the long run. We next present evidence from a systematic survey of existing RCTs, with a focus on cash transfer and child health programs, and show that a meaningful sub- set can realistically be evaluated for long-run effects. We discuss ways to bridge the gap between the burgeoning number of development RCTs and the limited number that have been followed up to date, including through new panel (longitudinal) data; improved participant tracking methods; alternative research designs; and access to administrative, remote sensing, and cell phone data. We conclude that the rise of development economics RCTs since roughly 2000 provides a novel opportunity to generate high-quality evidence on the long-run drivers of living standards.

A history of identity cards in Kenya

A blue passport, with the text "East African Community: Republic of Kenya", and the Kenyan crest with two lions and a shield and crossed spears(Photo via Wikipedia)

Passports are currently a hot topic in Kenya, where citizens are lining up for hours on end to replace their old travel documents before they cease to be valid for travel on September 1.  After that time, only new e-passports will be accepted.

At The Elephant, Juliet Atellah has a timely piece on the history of identity cards in Kenya.  She covers their evolution from tools of colonial social control for urban male laborers, up through the most recent attempts to create a unique numeric identifier that allows the government to link its identity records across different ministries (the Huduma Namba, or “service number,” system).  Well worth a read if you’re interested in Jame Scott’s ideas of social legibility.

Traffic tickets and statebuilding in Kenya

Last year I had my first experience with the Kenyan courts when I got a traffic ticket for making a left turn into a street against a “no left turn” sign, which I hadn’t seen.  Paying it cost me Ksh 20,000 / US$200 in cash, and took four hours at three offices over two days. It was quite a contrast to the last time I got a traffic ticket in the US, where I paid about $60 by mail after speaking with a police officer for about 10 minutes.  The whole experience left me thinking about the enormous investments in administrative capacity which are necessary to simplify this type of bureaucratic interaction with the state.

Traffic tickets in Kenya

The Kenyan process was logical, if also quite slow.  After an officer stopped me for the turn, he took me to a nearby police station, where I waited for half an hour while someone wrote up my charges in a massive paper ledger.  I also had to pay Ksh 5000 / US$50 in cash bail, and promise to come to traffic court the next day. Anyone who skips court has a warrant put out for their arrest, although I’ve heard that these are rarely enforced.

The bail system is in principle an improvement over an older system where people accused of traffic violations were jailed until their day in court.  However, in practice half of Kenyans live on less than Ksh 10,000 / US$100 a month, and might end up getting jailed until their court date anyway.  It’s also not possible to just plead guilty to the traffic offense and pay at the station, as all accused traffic offenders have to come to court to plead their case.  I assume this rule is in place to centralize financial flows and avoid the risk of officers charging fines and then failing to remit them to their stations.

I came to the Milimani Courts the next day for my hearing.  After waiting for an hour and a half, the judge entered the packed traffic courtroom and began reading through people’s names and offenses.  Common charges included having expired insurance, failing to wear a seatbelt, and failing to immediately remove a car from the roadway after it broke down.  No one could leave the room until everyone’s charges had been read, almost an hour later.

People who agreed with their charges had to pay fines of anywhere from Ksh 20,000 / US$200 to Ksh 60,000 / US$600.  This is under the maximum legal fine of Ksh 100,000 / US$1000, but is still high in light of average income levels, and also seems high given the fairly minor offenses with which people were charged.  I was fined $200, and had to pay it in cash, on the spot, before I could leave the courtroom. People who can’t pay are jailed until they come up with the money.   Finally, I spent another 45 minutes wandering through the courthouse until I found a representative of the police station where I had paid my bail, and was able to reclaim that money.

Traffic tickets in the US

It’s quite a big difference to the ticketing process in the US.  The last time I got a traffic ticket there was around 2007, when I got stopped for speeding on a country road in New Hampshire.  As far as I can recall, the police officer scanned my license, printed the ticket with a $60 fine on the spot, and then let me go 10 minutes later.  There were options to pay online or by mail within two weeks if you didn’t contest the charge, or to go to traffic court if you did.  If you fail to pay, punishments include having the fine sent to a debt collector or losing your driving privileges, with arrest warrants only issued for people who continued driving on suspended licenses.  I mailed in a check within the week, and that was the matter resolved.

The US ticketing process wasn’t simpler because we’re a more trusting or law-abiding society.  It’s because the US has systems of identification and options for punishment which don’t require physically holding someone in jail or the courthouse in order to be effective.  This requires a lot of investments in different aspects of administrative capacity, many of which on the face of it have nothing to do with traffic enforcement.

State capacity and the payment of fines

Let’s think through what it would look like to implement the US system of pleading guilty to a traffic offense via the payment of a fine (by mail or online) in Kenya.  The officer stops you, writes down your license information, and gives you a handwritten ticket with the proposed fine and a payment date within two weeks. We’ve already hit obstacle #1: as far as I can tell, there isn’t a digital record of the ticket integrated into any master database of traffic offenses, which means police can’t check on the spot to see whether this is your first offense.  (Free research idea: digitizing the absolutely massive stacks of handwritten police ledgers at local stations would provide really fascinating information about patterns of ticketing and arrests.)

Giving people two weeks to get together the money to pay the ticket is a good idea.  And these days, over 80% of Kenyans have M-Pesa, so it is possible to pay digitally.  But even a few years ago, this would have been impossible, since most Kenyans haven’t got bank accounts, which are required to pay by mail (with a check) or online.  That’s obstacle #2: assuming everyone has access to payment modalities other than cash.

Now we’re getting to the biggest issue: how do police enforce payment of the fine?  In the US, it’s technically illegal to jail people simply for failing to pay a fine.  This means that there are other civil penalties applied, such as turning the fine over to a debt collector, or suspending one’s license until the fine is paid.  (You can still be jailed for driving on a suspended license, so in practice many people are still eventually jailed for failing to pay, which is a significant problem.)  This approach assumes that there’s a robust credit reporting and debt collection system in place, and also a national system for flagging people with suspended licenses. Credit reporting and debt collection systems, in turn, only work well when individuals have fixed addresses, known places of employment, registered bank accounts, and identifiers such as a Social Security number to tie these disparate pieces of information together.

Informality and debt collection in Kenya

A lot of the infrastructure that facilitates debt collection doesn’t exist in the same way in Kenya.  More than 80% of Kenyans work in the informal sector (thus with no wages to garnish), 57% haven’t got bank accounts, 38% haven’t got any formal ID, and an unknown but presumably large number haven’t got formal addresses.  This means that a large amount of debt collection is done through highly personalized means, like having loan guarantors pressure the debtor, or by alerting the debtor’s family and friends that they’ve defaulted on a payment.  There is a credit bureau which blacklists people who default on loans, but it’s unclear how this information is used for debt collection efforts, as collection is rarely mentioned in articles about default.  Shopkeepers, who are a major source of non-bank credit for many Kenyans, seem to lose a lot of money on defaulted loans, suggesting that debt collection isn’t working very efficiently.

I don’t intend to sound overly friendly to debt collectors here.  However, this also explains the rationale for immediate payment of fines in traffic court.  If someone walked away without paying, there don’t seem to be good civil means like debt collection to enforce the fine, and presumably police don’t want to spend their time tracking down people whom they previously had conveniently collected at the courthouse.  Thus the pressure to pay immediately, which in practice must be a great hardship for most people who are issued a traffic ticket — and probably forces them further into debt elsewhere.

Upcoming Nairobi events

There are lots of great events on in Nairobi soon!  Check out these upcoming shows and conferences if you’re around.

June 6 – 16.  Nairobi Film Festival at Prestige Plaza.  Buy tickets at their website.

June 7: Panel discussion at the British Institute in Eastern Africa on “Land Governance and Subnational Dynamics in Kenyan Politics.”  Open to the public.

June 10.  Panel discussion at the Rift Valley Institute on “Research Collaboration in Conflict.”  Register online.

June 12.  Panel discussion on evidence-informed policymaking in Africa, sponsored by The Conversation Africa.  Email lavani.balipursad@theconversation.com by June 5 to register.

June 25: Panel discussion at the British Institute in Eastern Africa on “Securing the Local: The Role of Non-state Security Groups in the Struggle against Violent Extremism in Kenya, Nigeria and Indonesia.”   Open to the public.

June 25 – 26: Conference at the Catholic University of East Africa on “Power Narratives in Kenya’s 2017 Elections and Citizens’ Democratic Development Aspirations Beyond the Polls.”  Registration and payment due by June 24; follow link for more information.

July 22 – 23: 8th Annual East Africa Social Science Translation Collaborative (EASST) Summit, sponsored by the Center for Effective Global Action at Berkeley.  Register online.