By Daisy Sibun, University of Warwick
The prevailing logic of mainstream development theory tells us that economic policy is the primary driver behind any nation’s development. Such logic suggests that one can simply look at tweaking the macro-economic policies of a developing nation and herein lies the path to broader developmental progress. But this dominant conceptualisation overlooks the capacity of social policy, defined by Thandika Mkandawire as “collective interventions affecting transformation in social welfare, social institutions and societal relations”, to drive a more comprehensive and sustainable form of socio-economic development when designed to work on a more equitable basis in conjunction with economic policy (Mkandawire, 2001). More than just a way to remedy the fall-out of economic policies, social policy can be instrumental in generating growth and ensuring a level of productivity that is both socially sustainable and mutually-reinforcing in promoting desirable socio-economic outcomes.
It has been broadly accepted that the goal of development policy is more multi-faceted than simply achieving economic growth as an end in itself. The “trickle-down” views that permeated development thinking in the 1970s lost ascendency when it was widely realised that, without some deliberate policies to shape effects of economic growth and mitigate potential policy failures, there was no guarantee that this growth would trickle down and confront poverty. The incorporation into mainstream development theory of Mahbub ul Haq and Amartya Sen’s Human Development Index in the 1990s, for example, demonstrates the increasing consideration of more people-centred policies as a means to achieving a more comprehensive experience of development (UNDP, 1999).
Fundamentally, however, the role of social policy has remained limited and reactionary in its conception as a provider of “safety-nets”, used merely as an afterthought to mitigate the potential social costs and failures of economic policy. This subservient role of social policy continues to be institutionalised in the conditionalities of the IMF and World Bank’s Poverty Reduction Strategy Papers and their prescriptive primary focus on liberalising macro-economic policies. Neoliberal economics has presented social policy as a distortion to the labour market and a source of economic instability. This equity vs efficiency trade-off has remained dominant.
But treating social policy as subservient to the role of economic policy may overlook its capacity to play a more fundamental role in driving economic development. Development economist Thandika Mkandawire has pointed to the ways in which the more prominent integration of social policy into economic agendas can lead to promising socio-economic outcomes. Mkandawire opens up to discussion the idea that, far from being a source of economic instability, social policy, when designed complementarily in conjunction with economic policy, can generate growth that is both equitable and socially sustainable.
The economic potential of social policy becomes particularly evident when considering the case of Kibera, an informal settlement or ‘slum’ on the outskirts of Nairobi, which is home to what some sources have estimated to be over one million people (Mutisya and Yarime, 2011). Residents of Kibera have demonstrated entrepreneurial tenacity in creatively addressing the needs of their communities and targeted social policy could be used to support the development of Kibera’s promising informal economy and aid its capacity to generate economic growth for those who need it most.
Entrepreneurship and the creation of small businesses are increasingly providing an attractive alternative for young people in Kibera who face an economy with high youth unemployment rates and limited prospects for progression and social mobility. Many residents of Kibera effectively meet the demands of those in the community by providing paid services that have proved popular and effective business strategies.
These small-scale business activities are popularly referred to as Jua Kali and demonstrate the creative pragmatism of those living in the communities of Kibera. This ranges from creating solutions to existing social problems, such as providing a paid Masai security escort service for residents or visitors concerned for their safety when travelling the settlement at night, to developing small businesses that offer leisure services such as cinemas, music-sharing and rented gaming facilities. One such young business owner is Vitalis Odhiambo who, alongside running a clothing shop, has created a small, but popular, PlayStation-rental facility at which residents of Kibera can pay ten shillings for ten minutes of play (Higgins, 2013).
Such displays of initiative and innovation, coupled with access to a market of over one million potential customers, demonstrate that Kibera is a thriving economic machine with the potential to contribute substantially to the growth of Nairobi’s economy. A crucial roadblock to the further development and expansion of such small business models, however, is the inability of many of Kibera’s residents to access investment capital. Small business owners in Kibera often struggle to gain loans from banks because they lack collateral, are pushed out by high interest rates or because their insecure land tenures mean that they cannot provide a formal address (The Economist, 2012).
These are limitations that could be more pertinently addressed by integrating targeted social policy, such as housing policy that addresses the problem of tenure insecurity, into Kenyan economic policy. Whilst the government-led Kenya Slum Upgrading Project (KENSUP) has built alternative houses on the outskirts of Kibera, many residents have identified that relocating to new housing outside of their existing economic and community structures does not provide the best solution and have rejected the scheme (Tairo, 2013). A focus on transferring legal ownership of Kibera’s land from the government to the residents, some of whom have lived in Kibera since it was founded by the Nubian community in 1904, holds perhaps the most promising solution to overcoming social impediments to small-business expansion.
Education policy offers another way in which social policy can support the development of Kibera’s informal economy. Findings from Wise Sambo’s 2016 study of entrepreneurial development in Kibera revealed a strong positive correlation between the provision of youth entrepreneurship education and the development of youth entrepreneurship (Wise, 2016). More broadly, improving the welfare of citizens through healthcare policies may see economic benefits as life expectancy is a powerful predictor of economic growth (Mkandawire, 2001).
There is, of course, a danger that framing social policy in this way can instrumentalise it to the degree that is valued more as a means to growth than as an end that is intrinsically valuable in itself. Indeed, this is a concerning possibility that we should be mindful of in discussions about reconceptualising the role of social policy.
As long as we can continue to capture the absolute value that social policy provides in improving the human development of communities such as Kibera, a greater emphasis on designing social and economic policy as a more integrated process could have substantial benefits for socio-economic growth. Challenging the naturalisation of a neoliberal equity-efficiency trade-off can illuminate other ways of conceptualising the role of social policy in development issues that may provide more equitable and socially-sustainable development for communities such as those in Kibera.
Higgins, A. “Meet the innovators and entrepreneurs of Kenya’s Kibera slum”, One. [Online]. Accessed: https://www.one.org/us/2013/03/29/meet-the-innovators-and-entrepreneurs-of-kenyas-kibera-slum-part-2/.
Mkandawire, T. Social Policy in a Development Context. London: Palgrave Macmillan.
Mutisya, E. and Yarime, M. (2011) “Understanding the Grassroots Dynamics of Slums in Nairobi: The Dilemma of Kibera Informal Settlements”, International Transaction Journal of Engineering, Management, Applied Sciences & Technologies, 2(2): 197-213.
Tairo, A. M. (2013). “Why Slum Upgrading in Kenya has Failed”, Buildesign. [Online]. Accessed at: http://buildesign.co.ke/slum-upgrading-kenya-failed/.
The Economist. “Boomtown Slum”, The Economist, December 23 2012. [Online]. Accessed at: http://www.economist.com/news/christmas/21568592-day-economic-life-africas-biggest-shanty-town-boomtown-slum.
United Nations Development Programme (UNDP) (1999). Human Development Report 1999. Oxford University Press: Oxford.
Wise, S. (2016). “Factors affecting youth entrepreneurship development in Kibera, Kenya”, Problems and Perspective in Management, 14(3-1): 154-161.