Andrew Leonard, who blogs for Salon (free day pass required), commented yesterday on a new economics paper, “Does Digital Divide or Provide?: The Impact of Cell Phones on Grain Markets in Niger”. The article explains that increased access to cell phones in certain communities in Niger has had a powerful impact on grain prices. Giving people the ability to communicate over distance reduced regional grain price differences by 6.4%, and seasonal differences went down by 10%. The author estimates that the more regular prices meant lower costs for consumers during a period of shortages, and allowed people to buy from 8-12 days more food.
Based on this, Leonard then suggests that more Americans should donate their used cell phones for overseas use. He has a good point, and this is an example of a simple, painless kind of giving that can provide broad societal benefits.
I wonder how that would work. Mass donations from the US citizens require a high level of organization to collect, store, and distribute. It can actually be a very expensive process. It may turn out to be cheaper to market low-cost phones directly to poor countries. This is already happening, of course. There is also an apparently successful business model for selling refurbished cell phones.
As in most development effectiveness arguments, the answer is probably that both sales and donations are desirable. The sales reach a broader population, but the donations could be targeted a the people who are missed by the markets by poverty, location, gender, language, or one of the other countless variables that prevent people from fully taking part in society. Targeting these special cases would cost extra money, but would make the project fit much better into a comprehensive plan to increase cell phone use.
