Inclusive Markets and Paradigm Maintenance:

Informal Enterprise, Economic Inclusion and Islamic Extremism in

Nigeria

Kate MeagherLondon School of Economics

Making Growth Inclusive

• Market-led dev’t has brought jobless growth, expanding informality and poverty• Rise of more inclusive approaches to

development – post-2015 buzzword• Inclusive markets/BoP as solution to

unemployment and informality – connect poor into global markets• Dynamics of inclusion create new

dynamics of exclusion

Considering Inclusive Markets

Inclusive Markets: • Poverty as market failure – solution is

greater integration of poor into markets• beyond redistribution, aid dependence• Incorporate poor as agents of dev’t• Focus on structural transformation – link

business and finance to BoP to create jobs, foster entrepreneurship, financial inclusion

New Dynamics of Exclusion

• Processes of inclusion selective – selectively engage and reshape institutions, workers, subjectivities

Dark side of inclusive markets:• Open up new inequalities between

regions, workers, consumers• extractive effects on included;

displacement, marginalization, criminalization of those who don’t qualify for inclusion

A Tale of Two NigeriasNational inclusion: • Inclusive market success story -- MINT – high

grwth rates, rising investor engagement• Parallel tale of poverty, illiteracy and Islamic

terrorismInclusion: solution or problem?• exacerbated regional inequality – North: ed.

disadvantage, economy gutted by SAP• Fractious, uned. labour force, poor gov’ce –

unattractive to investors• Consider dynamics of exclusion unleashed by

inclusive markets

Methodology

• Fieldwork in April 2014 in Kano and Kaduna• 8 common informal activities –

stratified into modern, trad., survival• 53 interviews with associations and

rank and file• Survey of 187 operators• Core issue: inclusion generating

new patterns of competition in IE among those who don’t qualify

Contestation over Access to IE

• Saturation of informal economy• Nearly 1/3 don’t own own enterprise, esp.

survivalists• Avg 12 years in business – absorbed as

workers not entrepreneurs• Contestation by state indigenes over access

to IE• crowding into activities once dominated by

migrants – 55% indigenes• Resentment against entry of non-indigenes

– take jobs, reduce incomes

Activity Type

Years in This

Activity

Owner

Work for others

Share of Indigenes

Modern 10.4 73.8 26.2 63.6Traditional 15.3 79.3 20.7 58.3

Survival 9.6 53.3 46.7 42.6Average 11.7 68.9 31.1 55.1

Education

• High levels of education in IE• 42% seced or higher• In lowly activs, 12% post-sec.• Lucrative activ’s – 61% at

least seced; ~20% post sec.• In lucrative activ's, graduates

crowding out traditional actors – monopolize market opp’ties

New Religious Movements

• Rise of fundamentalist Islamic movements -- competitive ethos, intolerant• Eroding econ networks

between Muslims and Christians• dominating lucrative activ’s,

monopolizing associations, marginalizing Christians, other Muslims, poor

Internal Dynamics of Exclusion

• efforts to promote graduate entrepreneurshp, link informal services into GVCs (transport, butchers)• Ignore existing stresses on N.

Nigerian IE• Channelling graduates into IE,

upgrading, exacerbates crowding out of traditional operators

Beyond Inclusion

• National inclusion selective – put investors over needs of poor and unemployed• regional dynamic of marginalization, internal

dynamic of competition over scarce informal jobs• Inclusive policies make things worse –

indigenes, fundamentalists and graduates crowd out losers -- radicalization• Inclusive markets offer adverse terms and

perverse dynamics of exclusion -- another ‘Faustian bargain’?