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The women waited on the prickly grass, their babies hanging from nearby trees in brightly coloured string bags, too-quiet children on their laps. One by one they ascended the veranda steps to the blue Formica table, where the nurse asked them the questions they had heard many times before. “Skin hat?,” “kai kai?,” “Pek pek wara?” “Kus?” Do they have a fever? Have they eaten? Do they have loose stools? Do they have a cough? The women sat rigid on the hard bench and whispered barely audible replies. A thermometer was placed delicately under an armpit. The nurse listened to a child’s breathing with a stethoscope. A clinic book, detailing a child’s previous visits to the clinic was cursorily examined.

What were the options here? Pneumonia, malaria, diarrhea, hopefully not tuberculosis. The nurse was so familiar with the symptoms and the treatment possibilities that she rarely opened the small standard treatment book that sat on the neatly organized table next to her. Most of the children were given antimalarials (chloroquine with Fansidar), antibiotics (amoxicillin) and panadol. The mothers of the very sick ones (bikpela sik) were asked to come back if their child did not improve. They walked away in the blinding sun, carrying their children in their arms and their babies, parceled in their woven string bags, on their heads.

In 2004, when I visited Begasin Health Centre in Usino Bundi district, Papua New Guinea, diagnosis at a rural health clinic meant aligning a patient’s symptoms with available treatments. Some rudimentary diagnostic tools were available: a stethoscope, a thermometer, a sphygmomanometer. But most community health workers and nurses depended on a combination of clinical judgment and syndromic algorithms from standard treatment books to undertake what medical practitioners call “empirical diagnosis.” When the prescribed treatment did not work and patients returned to the health center sicker than when they had left, the health workers would scour the standard treatment book for other possibilities: tuberculosis, meningitis, dengue. There was no laboratory here, no way to test for these diseases, and very sick patients were referred to the general hospital in the coastal capital, several hours walk and a long bus journey away.

There was a microscope at Begasin health centre—possibly a remainder from earlier attempts to extend microscopy services into rural areas, or perhaps a one-off donation from a development agency or NGO—but no one knew how long it had been there or how to use it, and no one had the key to the wooden cabinet in which it was kept. Inside the clinic, a surplus box of microscope slides propped the window open, providing welcome ventilation to the humid, tin-roofed room.

The routine medical protocols I observed on the verandah of Begasin Health Centre in 2004 were a far remove from laboratory-based gold standards for medical diagnosis, yet they did comply with the standards for rural primary health care in low and middle-income countries. At the time, the WHO recommended that anyone presenting with fever in a malaria-endemic area with no access to microscopy services should be treated presumptively with anti-malarials. Empirical diagnosis based on clinical judgement was considered the only way for curative medicine to proceed in places where a lack of technical and transportation infrastructure and expertise precluded the extension of laboratory services.

Yet even as I observed the routine dispensing of antibiotics and antimalarials at Begasn Health Centre, elsewhere the norms for basic care in resource-limited settings were changing. Growing antimicrobial resistance to first-line drugs, such as those for malaria and tuberculosis, and the heightened cost of new drugs were drawing attention to the human and economic cost of empirical diagnosis and the overtreatment it generates. Nonetheless, the technology and expertise necessary for more accurate laboratory diagnosis simply wasn’t present in primary health care settings in many low- and middle-income countries, where the transportation, electrification, communication, and sanitation infrastructure that laboratories depend on did not reach.

A novel solution to this dilemma emerged in the late 1990s, with the development and release to market of a handful of malaria rapid diagnostic tests (MRDTs). These lateral-flow immunochromatographic tests used isolated antibodies to bind with malaria parasite antigens present in a blood sample. A positive test resulted in the appearance of a thin line in the test window where the antigen-antibody interaction occurred. MRDTs were not as accurate as laboratory based microscopy and, as the number of tests available on the market proliferated, concerns about disparity in the quality of devices and a lack of regulation in many low- and middle-income countries also grew. Nonetheless, these small devices had a significant advantage over laboratory-based assays: they were mobile.

Malaria rapid diagnostic test kits were transportable to places with limited road access. They compressed the time between test and result and therefore reduced the risk of losing patients to follow-up. They were affordable (with prices at around $1-$2 per testing kit) and easy to use, meaning they did not require a laboratory technician to read them. MRDTs extended the reach of laboratory medicine in two directions. First, they revealed the presence of pathogens hidden deep in the recesses of the diseased body. Second, they were designed to penetrate the farthest edges of the health system. Global health had entered the age of deep diagnostics.

Public Needs, Private Goods

The excitement that surrounded point-of-care diagnostic devices following the arrival of the MRDT turned on their potential to make the physical extension of laboratory infrastructure unnecessary. But the shift from laboratory to test also brought a wholly different—and equally problematic—infrastructure into view: the market.

The development of MRDTs by biotechnology brought the absence of comparable point-of-care testing devices for other treatable infectious diseases in low-income countries into sharp relief and spurred demands for their development. In 2006, for example, Médecins Sans Frontières (MSF) marked World TB day by calling for the “urgent need for ‘a simple test which yields results almost instantly and can be used by any laboratory technician, nurse or health workers even when far away from a laboratory.’” Campaign groups and public health experts made similar calls for diagnostics for neglected tropical diseases, such as trypanosomiasis and visceral leishmaniosis. Diagnostic devices are commodities, and their nonexistence was explained through the frame of market failure. The WHO focused on disincentives for industry to invest in the technology, including prohibitive R&D costs, a lack of regulation, uncertainty about market size, and concern about the ability of governments to pay for tests (AMS 2009: 9; WHO 2006). They discussed the need “to stimulate and facilitate the diagnostics industry to adapt available technologies to develop new diagnostics” (WHO 1998:2), and to call for partnership and engagement between the public sector and industry. In 1997, in an innovative move, the WHO organized a joint convention with industry to identify feasible TB tests for development. The premise of the convention was that public health experts could identify the tests that were needed, while industry representatives could help identify those that were most feasible (WHO 1997).

Emphasis on partnership gained momentum in the early 2000s, when the Bill and Melinda Gates Foundation entered the fray, adding diagnostics to its focus on drugs and vaccines within its mission to find technical solutions to global health challenges. The Gates Foundation already had invested in the establishment of novel public-private partnership arrangements for the development of life-saving drugs (DNDi) and vaccines (Gavi). In 2003, they donated $30 million to establish FIND, a nonprofit organization based in Geneva and often referred to as a “product development partnership,” with a remit of helping promising diagnostic developers to overcome development, regulatory, and market challenges. They also gave significant sums to PATH, a Seattle based nonprofit that develops new diagnostic tests, undertakes market research, and builds partnerships with industrial manufacturers.

By the middle of the decade, the global health community widely accepted that “strategic efforts to build laboratory capacity must be pursued urgently by partnerships between public (national and international), private and commercial sectors to address this health care crisis” (Petti et al. 2006: 380). With the articulation of a need for diagnosis segueing into the need for point-of-care diagnostics, work to improve the diagnosis of treatable diseases in resource-limited settings became concomitant with the work of “stimulating” and “shaping” markets for global health. These efforts to incentivize diagnostic development led to the creation of a whole array of market-making techniques, methods and devices, designed to align the necessary with the feasible, which are ancillary to the diagnostic device itself.

Market Devices

So the world needs diagnostics—but which diagnostics? Not only are there multiple candidate diseases for which diagnostics might be developed, there are also multiple possible ways to test for any single disease, from rapid antigen-based assays to molecular-level PCR. Depending on where a test is embedded in a patient care pathway, its infrastructural requirements, what kind of sample is obtained and how (finger-prick, intra-venous blood, saliva, vaginal swab, sputum, urine), and what the test seeks to detect (antigens, antibodies, biomarkers, pathogens) all determine what kind of information a test generates, how accurate that information is, and what can be done with it.

For example, a simple, affordable and easy-to-use test for tuberculosis with high sensitivity (ability to capture positive cases) and low specificity (ability to exclude negative cases) could be used at a peripheral health care setting to triage patients but not to make treatment decisions. Positive cases would need to be sent for confirmatory testing to ensure people are not treated with highly toxic drugs unnecessarily. A point-of-care non-sputum-based biomarker test with high sensitivity and specificity may enable positive diagnosis, but will not necessarily enlighten health workers about drug resistance or susceptibility.

For every disease, a multitude of tests with different performance characteristics are possible. How should diagnostic developers decide in which tests to invest their time and resources? Market logic demands that, if investors are going to invest in diagnostics, and developers are going to embark on lengthy R&D programs, they need to know there will be demand for the end product. Identifying which tests are “needed”—and therefore which tests future customers (bilateral agencies, philanthropic foundations such as the Clinton Foundation, and international organizations such as the Global Fund) are most likely to buy—has therefore become a crucial step in fostering markets for diagnostic devices.

A range of market-making techniques, methods, and devices has been developed or borrowed to help define diagnostic needs and align them with industry-led solutions. Here are three of them:

1. Forecasting

In 2004, in collaboration with the RAND corporation, the Gates Foundation established the Global Diagnostics Forum, an interdisciplinary research group with the goal of identifying which diagnostic tests are likely to have the most health impact and to stimulate interest in such tests among the global health community. As Deborah C.Hay Burgess explained in the forum’s subsequent special supplement of Nature, “An initial step in developing a rational strategy for creating diagnostic technologies for global health is to determine the need for, and the health impact of, potential new tests” (Hay Burgess et al. 2006: 2).

The forum used mathematical modeling techniques to predict the impact (measured in lives saved and disability-adjusted life years [DALYS]) for hypothetical tests in six disease areas (acute lower-respiratory infections, HIV/AIDS, diarrheal diseases, malaria, tuberculosis, and sexually transmitted infections). The GDF models quantified the difference between the status quo—in which empirical diagnosis is the norm in peripheral areas—and a future populated with rapid point-of-care tests.

The chief finding was that higher-accuracy tests, requiring more advanced infrastructure, would have a lower overall impact on disease burden than less-accurate tests that could be used in more peripheral facilities and therefore reach a greater number of people. For instance, a syphilis test requiring minimal laboratory infrastructure was calculated to prevent more than 138,000 congenital syphilis cases and more than 148,000 stillbirths annually. A test that could be performed with no laboratory infrastructure could prevent more than 201,000 congenital syphilis cases and 215,000 stillbirths annually (Urdea et al. 2006: 75; Keeler et al. 2006). Deeper penetration of the health system trumped the scientific penetration of biological matter. The impact of point-of-care diagnostic tests could be greater than that of gold-standard laboratory testing, so long as they were ambitiously distributed.

The scientific calculations that the GDF put forward made a forceful case for global health funders to invest in the development and procurement of rapid, portable, point-of-care diagnostic devices. Yet for all their apparent numerical objectivity, the GDF forecasts also depended on the construction of a compelling story about what global health “impact” looks like.

First, the GDF focused on the potential for point-of-care diagnostics to bring about some improvement, however minimal, for populations with inadequate access to diagnostic technologies: “We consider a new test to represent an improvement if it saves more adjusted lives than would be saved in the status quo” (Girosi et al. 2006: 6). This humanitarian calculus side-stepped tricky ethical questions about global health inequity; including whether it is acceptable for patients at peripheral facilities in low- and middle-income countries (LMICs) to receive a less-accurate diagnostic test than patients with access to laboratory services in wealthier countries or regions (see also Moran, this issue).

Second, the GDF forecasts implicitly abandoned older developmental visions of large-scale infrastructure development, accepting that the electrification and transportation infrastructures necessary for laboratories were unlikely to be extended uniformly across LMICs. In the GDF forecasts, the health centers where point-of-care tests were used would all remain disconnected from centralized electrification, transportation, sanitation, and communication infrastructures into the future. This was acknowledged in an aside made in one of the publications resulting from the project:

Although it is outside the scope of this paper, another method for improving health outcomes that could be approached in parallel to improving diagnostic tests would be enhancing the infrastructure and staffing available at these health-care settings. This approach would, in turn, allow the facilities to adopt better tests that might be available today or in the future. For instance, improving infrastructure and staffing could allow nucleic-acid-based tests for STIs to be adopted in more health-care settings” (Girosi et al., 2006: 8).

The GDF forecasts included calculations about the likely availability and success of treatment at different levels of health facility in different countries, but tenuous links between diagnostic test and treatment were, for the most part, glossed over. For example, the forecasts made no mention of the complexities of rolling out smooth medical supply systems, health-worker training, and treatment protocols in health settings lacking basic infrastructure. As critical global health scholars have shown, whether a test is used, how it is interpreted, and how it is acted on each depend on local institutional histories, relationships and expectations (e.g. Beisel et al. 2016; Chandler et al. 2011). The conflation of test availability with treatment created the impression that diagnostic devices have a direct impact on disease itself, occluding the many contingent steps in the diagnostic process, and focusing attention on the device itself as a worthy investment for global health funders.

Last, the GDF forecasts generated a vision of universal access to point-of-care testing that was, in some respects, no less grand than older developmental schemes. This was a vision in which there are tests for everything and tests everywhere. These tests would not be as accurate as laboratory tests that require carefully calibrated machines, refrigerated reagents, and highly trained technicians, but through sheer ubiquity they would save more lives than the best laboratory tests. This was a vision for a health infrastructure that is modest in quality but ambitious in reach.

Ultimately, the “success” of the GDF forecasts depended less on their scientific accuracy in predicting the future, than on their capacity to convince funders and developers that diagnostics have humanitarian, public health and economic value. The objective was to “articulate the acute need for diagnostic tools” and “encourage technology developers in the public and private sectors to do more to accelerate the development and delivery of new diagnostic solutions” (Hay Burgess et al. 2006: 2).

2. Consensus making

The GDF harnessed mathematical modeling techniques to evidence the need for specific diagnostics and incentivize funders and industry. However, time and again, the accuracy of mathematical forecasting has been shown to vary wildly. In 1967, the RAND Corporation published an influential paper outlining a new forecasting method, based on the generation of consensus among a community of experts. Ultimately, the author stated, mathematical models are only as good as the experts who provide the input values, so why not make this dependence on experts explicit and refine the process? The solution outlined in that paper, called the Delphi method, was first developed to forecast the impact of technological change on warfare. It was underpinned by the idea that groups are better at predicting the future than individuals, and anonymity will encourage flexibility and safeguard against status-based influence. A questionnaire was sent out to selected experts in the field. Their answers were anonymously summarized by a facilitator, who laid out common and conflicting viewpoints and reasoning and asked participants to revise their answers to the questionnaires in these responses. Over several rounds, the group was expected to move towards a consensus about what is most likely to happen.

Since the mid-20th century, the Delphi method has metamorphosed into a facilitation tool for the management of multi-stakeholder projects and is especially popular in global health. In the context of global diagnostics, it is not used to reconcile the predictions of different stakeholders, but to establish which futures—in the form of specific tests—are most desirable. In 2014, for example, the Global TB Programme of the World Health Organisation employed the Delphi method to identify priority diagnostic tests for tuberculosis (WHO 2014). The “experts” consulted in the Delphi Process included 24 participants from technical agencies and researchers (all but one based in the northern hemisphere); seven participants from funding organisations; five participants from supranational TB reference laboratories; five implementers and clinicians (all but one from institutions in the Northern hemisphere); and six representatives from countries with a high burden of TB. The process resulted in agreement on three diagnostic priorities: (i) a point-of care, biomarker-based, non-sputum-based test to detect TB; (ii) a point-of-care test that could be used for triage; (iii) a point-of-care sputum-based test that could be used as a replacement for smear microscopy. These were taken forward to a subsequent meeting with industry, where product profiles for the tests were agreed on.

The use of the Delphi method in this context raises questions about who is included and excluded from processes of defining global health needs. As one WHO representative put it to me, “The process works if you have the right experts.” But who are the “right” experts? Some lines of exclusion were explicit: for example, WHO rules designed to safeguard against the influence of commercial interests dictated that industry representatives were excluded from the process. Others were more opaque: the group was dominated by academics and public-health professionals from funders and global health organizations based in Europe and North America. In an indication of the extent to which the process of identifying needs was driven by market logic, these experts were also key individuals likely to influence their organization’s future procurement policies. Overall, out of 46 invited participants in the Delphi method, twelve were based at institutions in low- and middle-income countries with a high burden of tuberculosis.

3. Profiling

Needs must be met with solutions, and while it is sometimes deemed appropriate to exclude industry representatives from the definition of global health needs, their participation in the finding of solutions is presumed to be crucial if those solutions are going to be feasible. In 2014, following the use of the Delphi method to ascertain priority needs, the WHO hosted a meeting in Geneva where industry representatives were invited to help develop performance specifications (sensitivity, specificity, shelf life, infrastructure requirements, cost) for the priority tests. The final specifications were subsequently published in the form of four target product profiles (TPPs).

The TPP was a device originally designed by the FDA in the late 1990s to improve communication with the pharmaceutical industry during the drug-development process. Over the past decade, the TPP has found a new home among global health initiatives as a technique for reconciling needs with solutions, demand with supply. A TPP that has had input from funders, regulators, users, and industry not only describes a goal, in the form of a diagnostic test, but is intended to make its achievement more likely. TPPs, as one WHO representative explained to me, “are aspirational.” They are guidance for the manufacturer on what kind of tests agencies are willing to procure. At the same time, the role of industry in defining those characteristics means they are more likely to be met.

At the 2014 meeting, the writing of TPPs involved negotiations between advocacy groups and industry over the correct pricing of the tests, and between users and industry about the kind of temperature stability that would be required. The TPP convention of recording “minimum” and “optimum” specifications for each of these items meant that some degree of difference between stakeholders could be tolerated in the final profile. The TPP brought the desirable within touching distance of the possible.

Conclusion

The arrival of the malaria rapid diagnostic test fundamentally changed ideas about what kind of medicine was feasible and desirable at the periphery. It became possible to imagine that microbes, parasites, or viruses, which are imperceptible to the human eye, could be identified in bodily fluids by a health worker with basic training in a health facility with no running water, electricity, or laboratory equipment. In changing what was technically possible, the rapid diagnostic test kit also transformed expectations for everyday medicine in resource-limited settings. The human cost of misdiagnosis and unnecessary treatment, which previously had been accepted as the necessary cost of universal access to health care in places without a laboratory, now became an aberration demanding action.

The arrival of mobile point-of-care diagnostics also presaged a shift in the problematization of diagnosis in global health, from how to extend laboratory infrastructure to how to stimulate markets for mobile devices. Once the need for diagnosis in peripheral primary-care settings became commensurate with the need for diagnostic devices, the substantial problem-solving apparatus of global health institutions in Europe and the United States was focused on overcoming the challenge of market failure.

Ironically, given that the “need” for diagnostics in global health was framed as the motivation behind these activities, they also were aimed at specifying those needs. Once identified, needs also had to be articulated with feasible solutions—that is, small, portable, marketable diagnostic devices. The alignment of public needs with private solutions required a fine-tuned array of techniques, methods, and devices that would align the desirable with the feasible at the same time as they kept public and private interests distinct. Whether this has had any impact on the care provided at Begasin Health Centre in Papua New Guinea is another story.

Acknowledgements

This essay is based on research supported by the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme under grant agreement No 715450.

References

Academy of Medical Sciences. 2009. “Global health diagnostics: research, development and regulation. Workshop Report.” Available at: link.

Beisel, Uli.; René Umlauf; Eleanor Hutchinson; and Clare I.R. Chandler. 2016. “The complexities of simple technologies: Re-imagining the role of rapid diagnostic tests in malaria control efforts.” Malaria Journal, 15(1): 64.

Chandler, Clare I. R.; Rachel Hall-Clifford; Turinde Asaph; Magnussen Pascal; Siân Clarke; and Anthony K. Mbonye. 2011. “Introducing malaria rapid diagnostic tests at registered drug shops in Uganda: limitations of diagnostic testing in the reality of diagnosis. Social Science & Medicine (1982), 72(6): 937-44.

Girosi, Federico et al. 2006. “Developing and interpreting models to improve diagnostics in developing countries.” Nature, 444: 3-8.

Hay Burgess, Deborah C.; Jeffrey Wasserman; and Carol A. Dahl. 2006. “Global health diagnostics.” Nature, 444: 1-2.

Keeler, Emett.; Perkins, Mark D.; Small, Peter.; and Hanson, Christy. (2006). Reducing the global burden of tuberculosis: the contribution of improved diagnostics. Nature, 444: 49-57

Petti, Cathy A., Polage, Christopher R., Quinn, Thomas C., Ronald, Allan R., & Sande, Merle A. 2006. Laboratory Medicine in Africa: A Barrier to Effective Health Care. Clinical Infectious Diseases, 42(3): 377–382.

Urdea, Mickey et al. 2006. “Requirements for high impact diagnostics in the developing world.” Nature, 444: 73-79.

World Health Organization. 1997. Workshop report. “WHO tuberculosis diagnostics workshop: Product development guidelines.” Available at: link.

World Health Organization. 1998. “Global tuberculosis programme: The tuberculosis diagnostics initiative.” Available at: link.

World Health Organization. 2006. “Diagnostics for tuberculosis: Global demand and market potential.” Available at: link.

World Health Organization. 2014. Meeting report. “High-priority target product profiles for new tuberculosis diagnostics: Report of a consensus meeting.” Available at: link.

“Suppose you have a cut on your finger. Cut a piece of Band-Aid from the strip, pull off the face-cloth and put the bandage over the wound. That’s all there is to it. The bandage will stay right where you place it without tying. Can you imagine anything handier for the household or shop?” — The Red Cross Messenger[1]

“New situations demand new magic.”
(Evans-Pritchard 1937: 513)

The origin of the humble Band-Aid offers enticing material for corporate legend. In 1920, Earle Dickson was a cotton buyer for the medical supply company known as Johnson & Johnson in New Brunswick, New Jersey. Dickson, the story goes, had an accident-prone young wife named Josephine. Concerned about her tendency to acquire small injuries in the course of daily routines, he created an ingenious solution: a prepared set of strips combining sterile gauze, surgical tape and a crinoline fabric cover to keep it clean until use. Now, when his wife needed a dressing, she could simply take a strip, cut it to length, peel off the fabric and apply it herself. Minor wound care moved into the domain of self-treatment, a selling point that eventually convinced Dickson’s employer to begin marketing it the following year. After a slow start, the new bandage caught on. The company displayed enough marketing imagination to distribute it for free to Boy Scout troops across the country, and by 1924 had begun to offer machine-cut Band-Aids in multiple sizes.

BAND-AID® Brand Adhesive Bandage ad from 1920, showing the product as Earle Dickson invented it. Image: Johnson & Johnson Archives.

At the time of Dickson’s innovation, Johnson & Johnson was already a well-established and innovative enterprise. The company derived from the labors of three industrious brothers of that name, the eldest of whom, Robert Wood, had trained as an apothecary. Inspired by the surgeon Joseph Lister’s crusade for the merits of sterile surgery, he had gone into business with a fellow hygiene enthusiast, George Seabury, to create medical plasters and surgical dressings. In 1885 he joined his brothers in manufacturing ready-to-use dressings, and what came to be known as first-aid kits. By 1888, their product list included “accident and emergency cases” for antiseptic treatment, available in several sizes. After surveying railway surgeons across the country about their needs, the company launched a “railway station and factory supply case” containing a set of equipment that would enable station agents to respond to emergencies. In 1898 Johnson & Johnson supplied a “first aid packet” for soldiers fighting for the United States in the Spanish-American War, and in 1901 began producing first-aid instruction manuals. The range of kits on offer only would continue to grow with new transport inventions, like the automobile and airplane.[2] War was good to Johnson & Johnson. If not yet a fully transnational behemoth, it found ample opportunity in the mass suffering of European trenches even before the United States joined the First World War. At the close of the conflict, the company stood poised for new things, and the migration of bandages from battlefield to kitchen offered an expanding domestic front.[3]

Johnson and Johnson Band-Aid® products.

A deeper history of wound care might complicate this story, adding rival accounts and antecedents of packaged dressings and plasters, as well as shifting conceptions of risk. (See Tarr and Tebeau 1997 for more on concern about “accidents” in early 20^th-century America.) Likewise, a wider account of the rise of mass consumption and marketing might situate this particular story within a broad pattern of commodity domestication, such as campaigns to put cigarettes into the hands of women (Brandt 1996). Nonetheless, the corporate arc leading to the trademarked product officially known as the Band-Aid provides key elements for analysis. A simple but ingenious innovation, the adhesive bandage enabled the most ordinary and clumsy citizens to treat minor cuts and abrasions quickly and reliably wherever they found themselves. The early 20^th century housewife and shop operator each gained new assurance in their mechanized environments, freed from worrying about minor hazards contained in the tools of their trade. Standardized and pre-sterilized, the new strip was mobile while packaged and stable once applied. It was easy to use, durable in action and boasted a long shelf-life. A box of them anticipated future accidents and stood prepared for the next minor emergency. An icon of middle-class safety and hygiene was born: children would grow up receiving quick treatment for mishaps, in increasingly colorful forms. The Band-Aid fits neatly into the first-aid kit, a larger and more capacious assemblage of items with similar intent. Deposited around the landscape of everyday industrial life—houses, cars, boats, offices, airplanes—such kits provided a small cache of prepared supplies available for any need that might suddenly arise. Beyond a lucrative business opportunity for corporations like Johnson & Johnson, these little packets enabled a new norm of quick response. One might even describe them as a minor form of medicalization, redefining small problems through anticipated care. At the very moment cries and finger-pointing might begin, a solution now was already at hand, just awaiting application.

1970s Band-Aid® Advertisement.

In and of itself, it is hard to argue with a Band-Aid. As anyone who has used one knows, this little strip of adhesive tape and gauze offers an enchantingly simple and reliable response to a small cut, abrasion, blister, or splinter. Once sealed and padded, a minor injury can heal without further interference, causing less distress. If not fully therapeutic, or particularly effective at keeping a wound moist and sterile, the adhesive bandage would at least offer the advantage of protection as well as palliation. (Current medical consensus favors keeping wounds hydrated and covered; see Sood et al. 2014.) Here, at least, it would seem the overflow of 19^th-century military and industrial production offered some small benefits to civilian society.

Yet the Oxford English Dictionary records a second entry for the term, describing “a temporary or makeshift solution to a problem,” a merely palliative rather than properly curative result.[4] The connotation of this secondary usage is clearly negative, implying insufficiency and disappointment. Whatever the value of palliation for patient comfort, it does not address underlying causes and can appear unsatisfactory from a therapeutic perspective. Ultimately, a Band-Aid is a modest form of care, one that provides minor relief and minimal hygiene. It offers a poor substitute for a health clinic staffed by experts. No one would, or should, mistake it for a hospital. Moreover, a bandage placed over a poorly cleaned wound risks infection, ultimately concealing a festering sore. This second meaning of the term, then, introduces a dimension of critical distance into what would otherwise appear an innocuous, if not irreproachable good. Is a Band-Aid the right tool for the task? Is it enough? Or might it mask a deeper problem while providing false security?

This second, critical meaning of the term features prominently in discussions of international aid projects, which include a long history of things that appear superficially beneficial but quickly prove inadequate. Indeed, an entire approach in development and global health might appear cynically insufficient, the smallest palliation in the face of serious need. Such critical, suspicious use of the term invites interrogation, however, given its literal referent in a small, inoffensive adhesive bandage. At what point, and under what conditions, might a Band-Aid transmute from a modest improvement into a deceptive response? When does the inflection shift, from doing “a little good” to “little good”?

To help frame an answer, consider a second metaphorical referent. Like the Band-Aid, the phrase “magic bullet” appears with some frequency in contemporary discussions related to international aid and global health (e.g. Cueto 2013). Frequently, the use in this context is both metaphorical and pejorative, indicating a misguided faith in a would-be technical solution to a socially complex problem. It implies that belief in technology can itself turn into magical thinking, misapprehending the nature of the problem and forgetting larger truths in a quest for simple answers. Indeed, the phrase clearly references European folk tradition, in which a silver bullet might slay a monster such as a werewolf.[5] The silver bullet suggests a fetish of the classic sort, an object thought to possess extraordinary powers by those who believe in it and congealed mystification by those who do not (e.g. Latour 2010; Scott-Smith 2013). At moments of duress, facing a grave threat and the apparent failure of ordinary objects to meet it, magical thinking grows attractive. Surely someone should still act, and “do something”— even when confronting an apparently intractable challenge. The self-appointed task of any critic would then be to dispel fairy tales, unveiling illusions and exposing the false promises of an idol suffused with ontological and epistemological distortions. This is obviously easier to do when occupying a position of certainty and offering an alternative means to deal with whatever lurks beyond the door.

Dr. Ehrlich’s Magic Bullet, 1940. Directed by William Dieterle.

However, in medical history the magic bullet also signals another, positive framing, as a pharmaceutical concept introduced at the outset of the 20^th century by the German Jewish scientist Paul Ehrlich of “drugs that go straight to their intended cell-structural targets” (Strebhardt and Ullrich 2008: 1). Ehrlich’s vision of a charmed projectile suggests an alternative basis for allure: the capacity for specific targeting, as demonstrated by the synthetic drug Salvarsan against syphilis. Although anyone familiar with chemotherapy might recognize shortfalls in the current application of this concept in cancer treatment, an updated, genetically informed version of his dream remains very much alive. Targeting enables a different sort of magic — that of altering scale. Narrowing scope reduces the field of reference from macro to micro, permitting tangible, immediate action within a delimited space of encounter. Targeting nonetheless retains a degree of grand ambition. If the right projectile dispatches its werewolf anywhere, at any time, then a path to universality runs precisely through heightened specificity. Targeting also implies a reduction of waste and a minimization of unintended consequences. The objects it creates lend themselves to regimes of audit, testing, and recursive experimentation, while requiring neither mass labor mobilization nor state-level regulatory systems such as prior development regimes. A specific remedy shines brightly with the promise of efficiency. More might be accomplished with less, simply by concentrating the connection between problem and intervention. The contemporary magic bullet, then, may indeed be a fetish but one whose specific qualities of enchantment exemplify the historical moment. For tangibility clearly inspires those working on humanitarian objects and attracts the interest of influential publics. Rather than abstractly “doing good,” it suggests the possibility of making a specific, located, and measurable difference (Good and Good 2012).

When does a Band-Aid appear deceptive? The question correlates directly with the imagined parameters and scale of expectations that surround it. Scale is an inherently relational concept: a response appears small and attenuated when problems loom large and long. An adhesive bandage might work wonderfully for a superficial cut or abrasion but not a deeper wound. Yet as the legacy of the magic bullet recalls, a delimited scope also could signify precision: the hope that something small might produce a desired effect with fewer secondary consequences. This magic might prove illusory. It might inflate expectations and promise more than it could ever deliver or provide cynical cover for inaction. Nonetheless, the fact of its failure should not wholly displace inadequacy onto the object itself.

Even a cursory historical sketch of Band-Aids and magic bullets, then, can serve to complicate dismissals of small responses to large problems. My intent is not to discount the critical impulse behind these offhand references, which all too often prove painfully accurate about the demonstrable inadequacy of a given intervention, or the exaggerated claims attached to it. Rather, I seek to reorient this critical frame slightly and attend to the assumptions it carries in the moment of its deployment. Is there not another kind of enchantment involved in criticizing interventions with generic demands for “structural change,” whether those voicing the call are critical social scientists, activists, NGO practitioners, or even government ministers? For how is such change imagined? Does this imply the dream of a giant magic bomb, as it were, recalling political movements and revolutions past that upended norms in a complete and satisfyingly ambitious fashion. Or are these visions of expansive modernist planning and the kind of massive projects intent on sweeping, epochal shifts: dams and waterworks, electrical grids, splitting the atom, the dawn of a new age. In their small and flawed utility, little devices can at least open larger questions that otherwise might remain foreclosed. If a welfare state now appears the lost guarantor of security, then how might it be reconceived to include more than a national population? If industrial capitalism ultimately lies at the root of contemporary concerns over inequality and environmental degradation, then what might alternatives to its material norms look like in technical terms?

Recognizing that the problem with Band-Aids is primarily one of scale and application, it follows that a critical response should not simply expose such deficiencies but also explore them in relation to any desired alternative. The concept of scale is complex, suggesting dimensions of both size and level, for which reason some geographers have advocated dispensing with the term and adopting a flatter spatial vocabulary (Marston et al. 2005). But even a less-hierarchal theoretical frame would need to attend to scope and connection, as well as to the sense of a future that Reinhart Koselleck (2004) terms the “horizon of expectation.” Small and delimited interventions seem most inadequate when identified with neglect, cynical calculation or withered ambition. In other words, Band-Aids are most disturbing precisely when another response appears not just more desirable but also fully achievable. Conversely, it is the absence of faith in more comprehensive efforts, or fear of their side effects, that renders the tangibility of a targeted interventions singularly attractive. At moments when modernist utopian projects lose their grip on collective imagination, a cult of micro-interventions grows stronger, and in turn inspires critical nostalgia.

Easy dismissals of “micro” devices simply in terms of their meager size or likely failure, then, run the risk of trading one fetish for another: assuming that the real path to the future always lies in familiar “macro” technologies and planning. In an instant, the very industrial forms that might elicit ridicule from an ecological perspective (if not outright prophecies of doom, when framed by climate change and the Anthropocene), re-emerge as guarantors of social justice. Problems associated with actually existing welfare states and national infrastructural grids vanish—like rabbits from a hat—with the suffering identified in their retreat and inadequate coverage.  Somewhere between such oscillating fantasies lies the harder work of negotiating ambitions around development devices both large and small, and recognizing the significance of older forms without simply projecting them forward.

The Peepoo system. A packet contains a month’s worth of bags. Photo by Peter Redfield.

By way of illustration, let’s leapfrog from Dickson’s Band-Aid and domestic self-care in early 20^th-century America to a contemporary little device, and trace its uncertain career as a magic bullet in international aid. The Peepoo is a “personal single-use toilet” designed for use in poor urban settings and under emergency conditions. Created by a Swedish architect, and subsequently developed and distributed by a small Swedish social enterprise known as the Peepoople, it offers a simple means to dispose of human waste, neutralize its pathogens, and transform it into fertilizer, all in one go. Modeled on the “flying toilet” method of using plastic bags—an all-too real phenomenon of urban slum life—the Peepoo consists of a double-layered sack of biodegradable plastic with a small pouch of urea inside. As explained on the Peepoople website, the addition of this common fertilizer effects a magical transformation:

When the urea in Peepoo comes into contact with feces or urine, a breakdown into ammonia and carbonate takes place, driven by enzymes that naturally occur in feces. As the urea is broken down, the pH-value of the material increases and sanitization begins. Disease-causing microorganisms are inactivated after four weeks. Because dangerous bacteria are inactivated, there is no methane gas development from the feces inside Peepoo.[6]

Since the bag itself is fully biodegradable (“a mixture of aromatic co-polyesters and polylactic acid … with small additives of wax and lime”) and urea is a non-hazardous chemical, the eventual result is a safe and valuable bundle of nutrients for farming. In a miracle of modern alchemy, the Peepoo transforms waste into a potential commodity. Accepting the addition of fluid or toilet paper, it can handle the product of both “washers” and “wipers” equally.

Pee Poo instructions on the back. Photo by Peter Redfield.

However minimalist, it thus holds an eco-utopian promise of closing a circle even as it fulfills a humanitarian ambition of satisfying a vital human need. If incorporated into a micro-enterprise of fertilizer production, it might even offer possibilities for income and a modest means for economic development. At the same time, it requires neither water nor permanent space; it is fully mobile and can adjust to circumstances. The Peepoo is not simply a better plastic bag, then, but a serious engagement with a set of nested problems. Intended as both a humanitarian good and a development device—a caring commodity that also promises improvement—it additionally recognizes ecological concerns about human waste in urban settings. Carefully targeted, it would appear a very magic bullet indeed.

As with many such would-be solutions, however, the Peepoo has struggled to gain traction in practice. Even this admirably simple concept required considerable testing to produce the right technical variation and eventually a set of accompanying accessories. The size of the bag proved a balancing act, since the goal was to be just large enough for a single use; in addition to wasting material and adding to expense, a too-large container might invite reuse, which would counteract its hygienic ambitions. Scale is also a magical concept in market terms, here affecting both manufacture and distribution of everything from the biodegradable material to the potential fertilizer product. Only when amplified to mass production, with offsets of potential revenue, could the Peepoo ever hope to compete with ordinary plastic receptacles. Until then it would require subvention of some sort or another or an extensive marketing campaign to convince potential consumers of its superiority. Moreover, the very logic of its materials gave the Peepoo a relatively short shelf life; since biodegradable material is sensitive and deteriorates by design, the bag requires more durable outer packaging to last even two years. In other words, this product cannot sit and bide its time. To properly function and fulfill its promise, it demands regular use, in sufficient volume.

Fostering a reliable population of Peepoo users has proved elusive, particularly when pursuing Peepoople’s ambition of commercial sustainability. Although potentially valuable in emergency settings (in floods, for example, when sanitation systems are disrupted and it is hard to build latrines), the uncertain frequency of such demand made it hard to translate this potential into a stable consumer base. A set of field trials and experiments in a number of sites, including Bangladesh, Haiti, and Pakistan, finally yielded a couple of community projects in Kenya. But these efforts too soon encountered friction. Sanitation, of course, is more than a technical matter, as it involves an array of intimate and often sensitive social relations and cultural concerns. As a Peepoople representative told me in 2014, “It’s easy to sit from afar and say, ‘Oh, I have a great idea,’ without listening to people or considering the cultural aspect. Once you do then you realize it’s more complicated.” Although encouraged by studies that showed “high user acceptability,” the company still struggled to create durable demand between price, on the one hand, and preference, on the other.  Even a better plastic bag was not the most coveted sanitation device. As the same representative explained, “It’s a product that requires a lot of explanation and so comes with a lot of explanation. It’s not like a mobile phone that everybody wants, no questions asked, but rather needs social marketing for people to understand why this is important.” At the same time Peepoople’s efforts to market human fertilizer ran into cultural resistance and fears over contaminating food. To avoid the stigma of perceived pollution the company refocused on marketing it to tree farmers.

The gate at PeePoople, Kenya. Photo by Peter Redfield.

Production likewise proved a problem. After beginning as an enterprise in Kenya with semi-manual production, the Peepoople then sought to automate and lower costs by shifting manufacture to Germany, since the requisite materials were not available in Kenya and costly to import.  They also experimented with automated machinery, built by a German company that made diaper machines. Subsequently they moved production to Sweden to consolidate near their headquarters. But the actual demand never reached a level sufficient to justify the enterprise, and in late 2015 the Swedish office closed. The Nairobi branch remained open, if relatively somnolent when I visited in the following year, and the experiment appeared to have stalled awaiting resumption of local manufacture. However, in October 2016 a Stockholm-based Christian NGO called International Aid Services (IAS) acquired the Peepoople brand, vowing to keep the dream alive. At the time the user base consisted of some 20,000 people living in the Kibera slum in Nairobi, a market subvented by charitable donations.

The Peepoo, then, would seem a classic magic bullet, its earnest charms wavering while seeking an imagined target. From a critical perspective it appears a mere Band-Aid, a minimal improvement that fails to address the underlying factors that might drive someone to resort to a plastic bag in the first place. Some people I’ve discussed this with find the very concept offensive, and many raise trenchant concerns about its viability as a development device.[7] Such evaluations, however, should not overlook larger questions exposed by this simple sack with eco-utopian sensibilities. For the flush toilet, whether enveloped in middle class privacy or arrayed in a public block, may itself not offer a viable alternative, particularly when viewed from arid settings or at a planetary scale (Redfield and Robins 2016). An environmental perspective would suggest that water-based sanitation begs for reinvention, not further mass diffusion. In its own, humble way, the Peepoo opens this urban norm, calls attention to an exceptional violation—the plastic bag—and serves as a reminder of the deeper problem of waste. In this light, its shortcomings might yield not the end of the story but rather another beginning.

References

Brandt, Allan M. 1996. Recruiting women smokers: The engineering of consent. Journal of the American Medical Women’s Association, 51(1-2): 63-66.

Cueto, Marcos. 2013. “A Return to the Magic Bullet? Malaria and Global Health in the Twenty-First Century.” In When People Come First: Critical Studies in Global Health, Biehl and Petryna eds. Princeton: Princeton University Press,: 30-53.

Evans-Pritchard, E.E. 1937. Witchcraft, Oracles and Magic among the Azande. Oxford: Claredon Press.

Good, Byron J. and Mary-Jo DelVecchio Good. 2012. “‘To make a difference ….’: Narrative Desire in Global Medicine.” Narrative Inquiry in Bioethics, 2(2): 121–124.

Koselleck, Reinhart. 2004. Futures Past: On the Semantics of Historical Time. New York: Columbia University Press.

Latour, Bruno. 2010. On the Modern Cult of the Factish Gods. Durham, NC: Duke University Press.

Marston, Sallie A.; John Paul Jones III; Keith Woodward. 2005. “Human Geography without Scale,” Transactions of the Institute of British Geographers, New Series, 30(4): 416-432.

Redfield, Peter and Steven Robins. 2016. “An Index of Waste: Humanitarian Design, ‘Dignified Living’ and the Politics of Infrastructure in Cape Town.” Anthropology Southern Africa, 39(2): 145-162.

Scott-Smith, Tom. 2013. “The Fetishism of Humanitarian Objects and the Management of Malnutrition in Emergencies.” Third World Quarterly 34(5): 913-928.

Sood, Aditya; Mark S. Granick; and Nancy L. Tomaselli. 2014. “Wound Dressings and Comparative Effectiveness Data.” Advances in Wound Care, 3(8): 511-529. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4121107/

Strebhardt, Klaus and Axel Ullrich. 2008. “Paul Ehrlich’s magic bullet concept: 100 years of progress.” Nature Reviews Cancer 8(6): 473-480.

Tarr, Joel and Mark Tebeau. 1997. “Housewives as Home Safety Managers: The Changing Perception of the Home as a Place of Hazard and Risk, 1870-1940.” In Accidents in History: Injuries, Fatalities and Social Relations, Cooter and Luckin eds . Amsterdam: Rodopi: 196-233.

[1] Quoted in http://www.kilmerhouse.com/2008/09/how-to-use-a-Band-Aid-brand-adhesive-bandage/

[2] http://www.kilmerhouse.com/2013/06/from-1888-to-2013-celebrating-the-125th-birthday-of-the-first-aid-kit/

and http://www.kilmerhouse.com/2011/05/how-a-conversation-led-to-first-aid-kits/

[3] http://www.kilmerhouse.com/2014/08/world-war-i-centennial-how-the-great-war-changed-johnson-johnson/

[4] See OED entries under “Band-Aid” and “sticking plaster”; whereas the first only dates this secondary meaning to 1968, the latter traces it back to 1877. Since the generic term “plaster” describes a shifting lineage of therapeutic devices, from medicated pastes to industrial plastics, this secondary sense of inadequate treatment appears to well predate Dickson’s iconic product.

[5] A belief that obviously post-dates the invention and diffusion of firearms. See http://www.jurn.org/ejournal/Wettstein-Werewolf.pdf

[6] http://www.peepoople.com/information/faq/

[7] for commentary see, e.g. https://saniblog.org/2010/04/30/the-peepoo-bag-system-top-or-flop/

Feature Image: The werewolves of Ossory. A priest administers the Eucharist to the dying wife of a werewolf he meets in the woods.

Micro-hydropower technologies—systems that harness the energy in flowing water to produce between 5 and 100 kilowatts of electricity—have proven to be a particularly attractive kind of “little development device” in Nepal. While Nepal is a country with abundant water resources, the same fractal topography that provides Himalayan “hydraulic head” also limits the reach and feasibility of large-scale energy infrastructures. In recent decades, as plans for large-scale hydropower projects requiring big dams have waxed and waned, micro-hydropower projects that function at the community scale have provided electricity to hundreds of thousands of people living beyond the national grid.

More than 3,000 micro-hydropower projects capable of generating an estimated 48 megawatts have been built to date, constituting roughly 5 percent of Nepal’s total electricity generation (AEPC 2016). Considered against a backdrop of protracted political volatility and recursive patterns of developmental promise and failure, the proliferation of micro-hydropower in Nepal emerges as a tentative success story. A recent report by the UN Conference on Trade and Development (2017), for example, suggests that 81.7 percent of Nepal’s rural population now has reliable access to electricity.

On April 25, 2015, the 7.8-magnitude earthquake that struck Nepal prompted new questions about the relationship between energy security, environmental risk, and community resilience. Amid the diverse futures and risks carried by different forms of hydropower development in Nepal, micro-hydro technologies have helped facilitate the work of post-disaster recuperation and repair. In the Langtang Valley, the contrast between local efforts to construct a community-scale micro-hydropower project and plans for the much larger, 400-megawatt, Langtang Storage Project are examples of this.

Little Turbines and Big Dams

For the Langtang community, which was devastated by a massive co-seismic avalanche during the earthquake, the micro-hydropower project has emerged as a technology of hopeful post-disaster recovery and an investment in local autonomy. For planners, policymakers, and developers in Kathmandu, the separate large-scale storage project (designed to create a strategically important high-altitude reservoir that could help generate dry-season power and potentially supply drinking water to Kathmandu) is an important step in their ongoing project of “making a hydropower nation” (Lord 2014; Lord 2016). The contrast between these two differently imagined energy futures speaks to the scalar politics of energy security and the ways that Nepal’s hydropower frontier (half real, half imagined) is shaped by diverse economies of anticipation (Cross 2015).

Figure 1. Small, medium, and large scale hydropower projects licensed for development in Nepal at the time of the April 2015 earthquake—micro- and mini-hydropower projects smaller than 1 megawatt are not pictured. An interactive version of this map is available at link

In Nepal, micro-hydropower typically is framed as a technology for the liminal meantime: a temporary fix that eventually will become redundant with the arrival of an infrastructural future perfect. Nepalis living in communities away from the grid commonly reference micro-hydropower as a technology for coping with disconnection, abjection, uncertainty, and absence. As Cross (2016) also has pointed out, “Off the grid, grids do not disappear into the background but become the object of heightened attention. In places that are not connected to the electricity grid, and have little prospect of future connection, large scale electricity infrastructures can become more rather than less prominent” (194).

As one woman in the Lamjung district told me in 2014, for example: “Ma marepacchi matrai pradikhaaranko bijuli aauncha (Only after I am dead will electricity from the [Nepal Electricity] Authority come).” For Nepalis who identify themselves as members of a neglected infrastructural public (cf. Collier et al. 2016), micro-hydropower technologies offer a means of securing not only energy but also dignity, agency, and relative autonomy.

Yet in the wake of a disaster like the 2015 earthquake, the question of “what kind of hydropower development and for whom” re-emerges. In places like Nepal’s Langtang Valley, ongoing debates about “the damage done and the dams to come” in seismically active hydroscapes are particularly pertinent (Rest et al. 2015; cf. Butler and Rest 2017; Lord, in press). Though all infrastructures are contingent—tentatively situated in “demanding environments” (Carse 2014) and inclusive of their own potential ruination (Howe et al. 2015)—it is increasingly obvious that, in the Himalaya and elsewhere, some infrastructures are more precarious than others.

Anticipation and Seismic Risk

When the earthquake struck Nepal, I was standing in a part of the Langtang Valley that would be flooded by the lower dam of the proposed Langtang Storage Project—a 400-megawatt, two-stage reservoir project that is imaginatively rendered in a map of “Rasuwa Tomorrow” (see fig. 2). Just a moment prior, I had been discussing the prospect of this project with a Langtangpa hotelier named Dindu.

Figure 2. “Rasuwa Tomorrow,” an image created in 2014 by the Chilime Hydropower Company depicting an imagined infrastructural future in the northern region of Nepal’s Rasuwa District. In the upper-right quadrant of the frame, between images of gondolas and skiers, one can see the double reservoirs of the proposed Langtang Storage Project above and below Langtang village.

Like many other potentially “project-affected people” living across Nepal’s hydropower frontier, Dindu viewed the coming of a large hydropower project as a kind of opportunity—an infrastructural undertaking that would bring roads, a greater flow of tourists, and increased political connectivity. As a well-educated man, he also knew that the project would include a budget for “corporate social responsibility” that could be used to fund community development projects in the affected area. He also was aware of recent industry trends focused on “sharing the benefits” of hydropower development that already had turned several hundred thousand Nepalis into “local investors”—by selling them an equity stake in hydropower companies on the Nepal Stock Exchange (Lord 2016; Lord, in press). As one of more than 30,000 satisfied local shareholders of the Chilime Hydropower Company, which had constructed a 22-megawatt project downstream more than a decade earlier, he was interested in future opportunities for investment.

Standing outside his kitchen, Dindu and I spoke of the potential social and environmental impacts of the project, but not of seismic risk.

Suddenly, the earth heaved beneath us and a series of landslides broke loose from the steep valley walls above. Dindu grabbed my hand and we ran for open ground, struggling to keep our feet as the earth shook for a whole minute. We felt a wave of cold air, and it started to rain heavily as debris poured down around us. Confusion reigned. When the air cleared, we could see that a massive mixed-debris avalanche had buried the ancestral village of Langtang (see fig. 3), just a few kilometers upslope from us, taking the lives of more than 300 people. The scale of devastation and loss was incomprehensible.

Figure 3. Langtang village, before and after the avalanche (David Breashears/Glacierworks).

The earthquake caused significant loss of life, widespread destruction of property, and debilitating damage to a variety of critical infrastructures across Nepal. According to the official Post-Disaster Needs Assessment conducted in June 2015, seventeen grid-connected hydropower projects representing roughly 15 percent of national generation capacity were “severely damaged,” and damage to transmission and distribution infrastructures left some 600,000 households without electricity (Government of Nepal 2015). The event also troubled the making of Nepal’s promised energy future, as dozens of hydropower projects still under construction were damaged—in some of these areas, locals say that landslide occurrence was intensified by the blasting of project tunnels. In short, the event exposed a variety of threats to large-scale infrastructures.

Figure 4. A photograph of the lights of Langtang village, taken shortly after the installation of the first micro-hydropower project in 1998 (K. Togami, The Tokyo Shimbun).

Walking through the avalanche zone a few months after the earthquake, I encountered the remains of the Langtang community micro-hydropower project. Built in 1998 with support from a Japanese NGO, the project was presented as both an investment in community infrastructure and a technology of environmental governance—one of several initiatives designed to help the Langtangpas sustainably accommodate rising tourism in Langtang National Park, which was created around the community in 1976. As tourism and local demand for electricity continued to increase, the project was upgraded to 11 kilowatts—indexing both an improvement in the material conditions of life in the valley and changes in the ways the Langtangpa were “imagining the good life” (Lim 2008). When the avalanche came, it took the micro-hydropower project, and everything else. But, critically, the destruction of this project did not amplify the effects of the disaster or expand vulnerability/exposure.

Figure 5. The remains of the Langtang micro-hydropower project (Austin Lord).

Since the vast majority of the dams planned across Nepal had not yet been constructed when the earthquake hit, there were no dam failures. However, if the proposed Langtang Storage Project had been built prior to the earthquake, then the avalanche—a mass of 3 billion kilograms that fell more than 3,000 meters from the slopes of Langtang Lirung (7,234m) and covering a kilometer of the Langtang river in debris while releasing half the force of the Hiroshima atomic bomb (Kargel et al. 2016)—could have caused a dam failure, and perhaps thousands more deaths downstream. How to think the unthinkable?

Micro-Hydropower and Reconstruction

In the aftermath of the disaster, the entire Langtang community was displaced to Kathmandu, where they lived in a camp for internally displaced persons for several months. As the aftermath dragged on, the people of Langtang slowly returned to begin the long and painful process of rebuilding their lives—despite the extreme level of damage, a remarkable lack of support from the Government of Nepal, and the logistical challenges of rebuilding in such a remote location.

Though the earthquake had damaged more than 300 micro-hydropower projects, the majority could be retrofitted or repaired (Government of Nepal 2015). While the Langtang community had repaired the micro-hydropower facility and local transmission systems several times in the past (in response to damage inflicted by storms, rockfall, and smaller avalanches) the exceptional intensity of the 2015 avalanche and questions of safety at the project site prevented them from doing so again. They had to formulate a new energy strategy.

For more than two years, the Langtangpa relied on solar units for electricity (mostly donated by humanitarian organizations and volunteers after the disaster, with a few older units salvaged from the hotels). When the Langtang Management & Reconstruction Committee announced plans to construct a new micro-hydropower project in late 2016, it seemed like a hopeful point of inflection in the process of reconstruction and recovery.

Figure 6. Project materials being airlifted by helicopter to the project site at Kyangjin Gompa in November 2016 (Nima Lama).

Construction on the project, relocated to a new site further up the valley near Kyangjin Gompa, began in early 2017. The project was funded largely by a British NGO called Kadoorie (an organization focused on agricultural development and community infrastructure, now working to support post-disaster recovery) with additional contributions from the Langtang Management & Reconstruction Committee and the Local Development Office of Rasuwa District. With the permission of the Langtang National Park, the capacity of the new project was scaled up to 100 kilowatts, to provide electricity to 116 households, a variety of communal buildings, and the recently rebuilt monastery at Kyanjin Gompa. The project is also expected to support a handful of local enterprises, such as the famous yak-cheese factory that processes milk from local herders, which will now use far less fuelwood for pasteurization.

The local leaders of the Micro-Hydropower Project Committee that was created to manage the construction process often describe the project as an effort to create a secure future. For them and many other Lantangpas, it is important that the project provides more than enough power to meet current needs, that it will be able to accommodate future demand once the Langtang Valley makes a full recovery. In this sense, the micro-hydropower project has been maximized, so as to obviate the need for future upgrades or external support—to sustain Langtang society beyond the reconstruction phase as the shape of its needs continue to change.

Figure 7. Transmission towers awaiting powerlines along the trail through the Langtang Valley in July 2017 (Austin Lord).

When I visited the Langtang Valley in July 2017, the majority of people were still rebuilding their houses and the path was lined with transmission poles awaiting power lines (see fig. 7). The project site was a tangle of activity, with one team installing the turbine assembly inside the powerhouse and another busy constructing the 230-meter penstock pipe that would be used to channel water from the lake. Electricity meters and spools of wire were stacked up inside the powerhouse. After several weeks spent transporting materials to the site, all was ready.

Figure 8. Installation work going inside the project powerhouse in July 2017 (Austin Lord).

Later that day, I met with Son Nurpu, the Secretary of the MHP Project Committee, and climbed up to the project intake at Lirung Tal (the glacial lake that supplies the new project, located roughly 150m higher than the powerhouse). Along the way, he explained more about the technicalities of construction process, the trainings that the local technicians had received, the local electricity metering system they would manage, and the work that still remained. When we reached the lake, Son Nurpu climbed onto the headworks at the outlet of the lake and posed theatrically, smiling with a contagious enthusiasm. After watching the broader Langtang community struggle for more than two years, this was a powerfully affective and hopeful moment.

Figure 9. Durga Bahadur, the project site supervisor from Kadoorie, stands next to the incomplete penstock pipeline while explaining the project design in July 2017 (Austin Lord).

Recuperation and Repair

As an off-grid infrastructure, the micro-hydropower project in Langtang functions in two registers: it facilitates systemic recovery while also creating space for and enabling the more creative and hopeful practices of recuperation. As Guyer (2017) suggests, efforts toward recovery focus on functionality and reconstitution, while practices of recuperation are more improvisational, fragmentary, and open-ended.

Figure 10. The project headworks and intake at the outlet of Lirung Tal (4055m), the glacial lake that serves as the natural reservoir for the project (Austin Lord).

If micro-hydropower projects like this are successful, perhaps it is because they are adaptable and can be reconfigured to serve diverse communities and needs. In this sense, micro-hydropower is a “fluid technology” (Law and Mol 2001; Redfield 2016), which can be reconfigured to fit the exigencies of a particular landscape and create “fluid space” outside of broader networks, like the grid. Indeed, micro-hydropower has been used for centuries in a variety of cultures and conditions, in the cracks and gaps of other systems, well before it acquired its current status as a “little development device.” The resilient and fluid qualities of micro-hydro that humanitarians now acknowledge are intrinsic to its historical success.

Figure 11. MHP Committee Secretary Son Nurpu posing dramatically on the headworks of the micro-hydropower project in July 2017 (Austin Lord).

Though the Langtang micro-hydropower project has only just been built, the site-specific and improvisational quality of the design speaks to its fluidity.

The unique location of this project, which is sited at the outlet of a glacial lake at an elevation of 4055m (reportedly the highest project site in Nepal), speaks to the ways that micro-hydropower systems can be adapted to the particularities of landscapes. For centuries, the people of Langtang have been living with and adapting to geological hazards and climatological exposures: repairing homes, trails, and other local infrastructures as needed in response to landslides, avalanches, earthquakes, and storms. They have developed their own version of what Jackson (2014) conceptualizes as “broken world thinking,” oriented around the repeated practice of “the subtle arts of repair by which rich and robust lives are sustained against the weight of centrifugal odds” (222). As such, the new project was built in an area the locals say is naturally sheltered from future avalanches by a nearby glacial moraine—it was reconfigured and placed in the landscape.

Figure 12. Tools and fuses hanging in the project powerhouse. A locally managed account has been created to fund any necessary maintenance or repairs that might be needed in the future (Seraph Tamang).

In response to a suggestion from Sangay, one of the Langtangpa lamas (Tibetan Buddhist monks), the design of the micro-hydropower project also was modified so that the water flowing through the turbines could be diverted to turn a large prayer wheel housed within a recently built Memorial Stupa—a structure dedicated to the memory of those who lost their lives during the earthquake, constructed in part by donations from families around the world who lost loved ones in Langtang. This joining of infrastructure with local practices of prayer and memorialization is particularly important because Langtang is considered a beyul, or a sacred hidden valley meant to serve as a refuge for Tibetan Buddhist practice (Lim 2008). This particular improvisation scales up the traditional practice of building smaller prayer wheels that can be turned by a mountain stream—a design that predates the advent of electricity and is still used throughout the Himalaya. As the water flows through the prayer wheel it is understood to be sending prayers to the heavens in perpetuity, animating the scarred landscape.

Figure 13. The Langtang Memorial Stupa, where water diverted for the micro-hydropower project is now flowing beneath this stupa, turning a large prayer wheel inside (Austin Lord).

In these ways, the micro-hydropower project has become meaningfully imbricated in localized processes of recuperation and repair in a way that would not have been possible with a larger and pre-configured technology. It was designed to account for both the material agencies of the environment and its own precarity, and reconfigured in ways that enabled the contingencies of local “repair work.” As Jackson (2014) explained, the work of “repair occupies and constitutes an aftermath, growing at the margins, breakpoints, and interstices … it fills in the moment of hope and fear in which bridges from old worlds to new worlds are built, and the continuity of order, value, and meaning gets woven, one tenuous thread at a time” (223). The construction of this new micro-hydropower project in Langtang, a highly situated and highly relational infrastructural technology, reflects the multivalent efforts required to weave a fractured community back together in the wake of disaster.

Instability and the ‘Hydropower Nation’

When the earth shook, it created a series of cracks in the future perfect, momentarily interrupting Nepal’s dream of becoming a “hydropower nation” and creating an opportunity to rethink the country’s energy strategy. In the aftermath of the 2015 earthquake, one of Nepal’s most prominent politicians and policymakers co-authored a piece in The New York Times calling for a more diversified energy strategy in Nepal. In no uncertain terms, the piece asked, “Can Nepal rely on its built and planned hydro infrastructure given the inevitable seismic activity in the Himalayas?” (Thapa and Shrestha 2015: 1).

Figure 14. A photo of the micro-hydropower project demonstrating its scale and position in the broader landscape, taken shortly before project completion (Ayako Sadakane).

Ongoing debates over the inherent risks of hydropower development in the Himalayan region point to a need for “technologies of humility” (Jasanoff 2003) that recognize the limits of knowledge and prediction. As a place where the material agency of the landscape has been made so apparent and so much is uncertain or unknown, the Langtang Valley seems an appropriate place to consider the value of humility. Indeed, with an earthquake even more powerful than that which devastated the Langtang Valley in 2015 now considered overdue in Western Nepal, and massive uncertainties about the impacts of climate change lingering over the Himalaya like a cloud, a degree of infrastructural humility would seem critical.

Yet in contrast to the humility of micro-hydropower, the large hydropower projects being planned and built across the Himalaya, which require building immense webs of concrete and tunnels throughout a seismically active zone, seem to materialize a specific kind of infrastructural hubris.

In the wake of the earthquake, the Government of Nepal has expended considerable energy to ensure that its hydropower frontier has remained open for business. Official plans for large-scale hydropower infrastructures remain intact, emboldened by the speculative logics of finance capital, geopolitically inflected narrative of energy sovereignty, and the inertia of infrastructural affect focused on a dream deferred (Lord, in press). This failure to reckon the inherent precarity of Nepal’s imagined hydropower future reflects a familiar pattern of infrastructural ambition and oversight (Huber et al. 2017; Butler and Rest 2017). Like large-scale infrastructure projects across the globe, Nepal’s big hydropower projects are imaginative undertakings enacted “through engineering hubris, false environmental assumptions, and short-sighted development policies” that elide their own vulnerabilities (Carse 2017: 905). The continued focus on achieving energy security at the national scale marginalizes alternative accounts of Nepal’s energy futures and perpetuates a “strategic ignorance” (McGoey 2012) of palpable environmental and infrastructural risks.

Between Hubris and Humility

At the time of this writing, the Langtang micro-hydropower project has just been completed, and the lights are on throughout the valley—which this struggling community is incredibly proud of. Tellingly, at the same time, the 400-megawatt Langtang Storage Project is moving ahead as planned—with the support of state officials, the Langtang National Park, the private sector, and a segment of the Langtang community. Helicopters are flying into Langtang with surveyors; contracts are being discussed. As post-disaster reconstruction continues, new uncertainties are emerging.

Across the Himalayan region and perhaps the world, infrastructures and their infrastructural publics are constantly being made and unmade, prompting a tacking back and forth between hubris and humility. When speaking about the large-scale project and the increased connectivity it might bring, many Langtangpa express a kind of ambivalence, often using a classic Nepali phrasing to highlight the double-edged nature of development, pointing to “bikas sangai binas [development with destruction]”. Some fear the changes the large-scale project could bring; others still dream of “Rasuwa Tomorrow.” When considering the entanglement of these differently imagined futures and the technologies used to enact them, the question recurs: what kind of development or destruction, and for whom?

Figure 15. Dindu, the man who I was speaking with about the proposed hydropower project at the time of the earthquake, stands in the blast zone of the Langtang avalanche (Austin Lord).

Acknowledgments

This essay draws on field research supported by Cornell University and a U.S. Foreign Language and Area Studies Fellowship. I would also like to thank Sudan Bhattarai, who assisted greatly with field research in the Langtang Valley, as well as Marina Welker, Ashley Carse, and the Editors of Issue Number Nine who provided valuable feedback on prior drafts.

References

Alternative Energy Promotion Centre, Ministry of Population and Environment, Government of Nepal. 2017. Website & Data. Available at link.

Butler, Christopher, and Matthäus Rest. 2017. Calculating Risk, Denying Uncertainty: Seismicity and Hydropower Development in Nepal. HIMALAYA, the Journal of the Association for Nepal and Himalayan Studies, 37(2): 15-25.

Carse, Ashley. 2014. Beyond the Big Ditch: Politics, Ecology, and Infrastructure at the Panama Canal. Cambridge: MIT Press.

Carse, Ashley. 2017. “An Infrastructural Event: Making Sense of Panama’s Drought.” Water Alternatives, 10(3): 888-909.

Collier, Stephen; Chris Mizes; and Antina von Schnitzler. 2016. “Preface: Public Infrastructures / Infrastructural Publics.” Limn, 7(1). Available at link.

Cross, Jamie. 2015. “The Economy of Anticipation: Hope, Infrastructure, and Economic Zones in South India.” Comparative Studies of South Asia, Africa and the Middle East, 35(3): 424-437.

Cross, Jamie. 2016. “Off the Grid: Infrastructure and Energy Beyond the Mains.” In Infrastructures and Social Complexity: A Companion. Harvey, Jensen, and Morita eds. Abingdon, UK: Taylor & Francis, 186-196.

Government of Nepal, National Planning Commission. 2015. “Post Disaster Needs Assessment, Vol. B: Sector Reports.” Kathmandu: Government of Nepal. Available at link.

Guyer, Jane. 2017. “Aftermaths and Recuperations in Anthropology.” Hau: Journal of Ethnographic Theory, 7(1): 81-103.

Howe, Cymene et al. 2015. “Paradoxical Infrastructures: Ruins, Retrofit, and Risk.” Science, Technology, & Human Values, 41(3): 547-565.

Huber, Amelie; Santiago Gorostiza; Panagiota Kotsila; María J. Beltrán; and Marco Armiero. 2017. “Beyond ‘Socially Constructed’ Disasters: Re-politicizing the Debate on Large Dams through a Political Ecology of Risk.” Capitalism Nature Socialism, 28(3): 48-68.

Kargel, J.S. et al. 2016. “Geomorphic and Geologic Controls of Geohazards Induced by Nepal’s 2015 Gorkha Earthquake.” Science, 351(6269).

Jackson, Steven. 2014. “Rethinking Repair.” In Media Technologies: Essays on Communication, Materiality, and Society, Gillespie, Boczkowski, and Foot eds. Cambridge, MA: MIT Press, 221-239.

Jasanoff, Sheila. 2003. “Technologies of Humility: Citizen Participation in Governing Science.” Minerva, 41(3): 223-244.

Law, John, and Annemarie Mol. 2001. “Situating Technoscience: An Inquiry into Spatialities.” Environment and Planning D: Society and Space, 19(5): 609-621.

Lim, Francis Khek Gee. 2008. Imagining the Good life: Negotiating Culture and Development in Nepal Himalaya. Leiden: Brill.

Lord, Austin. 2014. “Making a ‘Hydropower Nation’: Subjectivity, Mobility, and Work in the Nepalese Hydroscape.” HIMALAYA, the Journal of the Association for Nepal and Himalayan Studies, 34(2): 111-121.

Lord, Austin. 2015. Langtang. Hot Spots, Cultural Anthropology website, October 14, 2015. Available at link.

Lord, Austin. 2016. “Citizens of a Hydropower Nation: Territory and Agency at the Frontiers of Hydropower Development in Nepal.” Economic Anthropology, 3(1): 145-160.

Lord, Austin. In Press (2018). “Speculation and Seismicity: Reconfiguring the Hydropower Future in Post-Earthquake Nepal.” In Water, Technology, and the Nation-State. Menga and Swyngedouw eds. London: Routledge Earthscan.

McGoey, Linsey. 2012. “Strategic Unknowns: Towards a Sociology of Ignorance.” Economy and Society, 41(1): 1-16.

Redfield, Peter. 2016. “Fluid Technologies: The Bush Pump, the LifeStraw® and Microworlds of Humanitarian Design.” Social Studies of Science, 46(2): 159-183.

Rest, Matthäus; Austin Lord; and Christopher Butler. 2015. “The Damage Done and the Dams to Come.” Hot Spots, Cultural Anthropology website. 14 October 2015. Available at link.

Thapa, Gagan, and Kashish Das Shrestha. 2015. “Natural Disasters and Nepal’s Energy Security.” The New York Times, DotEarth Blog, May 25, 2015. Available at link.

United Nations Conference on Trade and Development (UNCTAD). 2017. “The Least Developed Countries Report 2017: Transformational Energy Access.” Geneva, Switzerland: United Nations. Available at link.

Muhammad Yunus won the Nobel Peace Prize in 2006, the most prestigious of a string of awards celebrating his role in creating banks for the poor. If there was a Nobel for marketing, he could have won that, too. That’s not meant as a jab but as recognition of Yunus’s rhetorical flair. Yunus not only founded a financial institution that serves the poor in Bangladesh (Grameen Bank, the 2006 Nobel co-winner), he also crafted a global vision for funding entrepreneurs and tirelessly promoted it for three decades.

Muhammad Yunus at the unveiling of his official portrait as Chancellor of Glasgow Caledonian University. June 29, 2016. Photo by Author.

But today Yunus’s vision — and the assumptions it rests on — is coming apart. Microfinance has proved fairly robust as a banking idea but not as an anti-poverty intervention.

Yunus’s pitch for microfinance was designed to please donors and socially-driven entrepreneurs who might follow his lead. His pitch is simple, promises much, and asks little of donors and aid agencies. The focus is on loans that are funded mainly by borrowers’ interest payments. The microfinance loans, Yunus argues, fund small, under-capitalized businesses and thereby transform their ability to generate income. That accomplishment, he claims, can reduce poverty dramatically. In contrast to the targets of previous attempts to fix credit markets in low-income areas, the borrowers are mostly poor women, the loans are small (starting around $100), and repayments are made in manageable weekly installments over a year.

Microfinance is an unusual kind of “device.” Most important, it’s a set of financial services, not a tangible product. But the microfinance narrative is very much bound up with its “device-like” qualities: microfinance is tailored to meet a narrow, specific purpose; its presentation and delivery are standardized and easily replicable; it is sold in standard units without much customer support; and it is brought into communities without substantial adaptation to the local context. Ideally, context should matter more, but customization is costly. The device-like nature of microfinance permits lenders to expand quickly and slash costs.

Microfinance is device-like in another way. Many microfinance providers seek to earn profit and pay for their work through a fee-for-service business model. Microfinance institutions thus aim to operate independently of the state’s purse and outside its purview. Unlike public social insurance programs that redistribute income, microfinance leaves poor people to find — and fund — their own ways out of poverty. Grameen Bank’s success in Bangladesh — it now serves over 8 million customers — has been a model for similar entrepreneurial, market-friendly approaches to social problems, including private health clinics and ambulance services for the poor, private schools in slums, and a range of other interventions that graft do-good aspirations onto market models.

The pitch for microfinance hasn’t been embraced by everyone. Some argue that poor adults need quality jobs, offering employee benefits and possibilities for promotion, not self-employment in tiny, self-managed businesses (Bateman and Chang 2012). The anthropologist James Ferguson argues that the rise of publicly-provided cash transfers holds far more interest than “paradigmatically neoliberal” interventions like microfinance (Ferguson 2015: 1). Empirically-minded academics (who may have started with high hopes for microfinance) also point to evidence from independent research that fails to find clear causal impacts of microfinance on business growth or poverty reduction for most customers. Aid agencies and foundations have been left feeling confused, disappointed, and perhaps betrayed — and have started moving on (Mossman 2015).

But too quickly dismissing microfinance as a “sort of neoliberal predation” (Ferguson 2015: 2) or as a poor substitute for social insurance or alternative income-generating interventions fails to get at the root of microfinance as practiced. So does outright rejection based on econometric studies of hard-to-find causal impacts on business outcomes. The arguments against microfinance may be correct on the surface, but they fail to get at what microfinance actually is and how it really works.

Although microfinance has failed relative to its boldest claims, it has not failed unconditionally. In fact, microfinance has been a wild, improbable, impressive success in important ways. Microfinance grew fast in Bangladesh, serving women whose families live on incomes that are low, if not among the country’s very poorest, and the broader movement inspired by Yunus and his fellow pioneers now serves more than 200 million people globally. Each week, microfinance institutions bring reliable financial services to citizens who otherwise would be ignored and excluded by traditional banks.

We are then left with a puzzle. Why do so many millions of people want microfinance if it fails to deliver on its promises?

The problem is not with its device-ness but with its portrayal. The practice of microfinance is distinct from the narrative that Yunus created to promote it. Microfinance customers have re-imagined what the financial services can do and why they need them. Customers divert microfinance loans from businesses and instead use them to spend on other priorities. By doing that, borrowers provide an alternative view of their real needs (and an alternative view of microfinance’s possibilities). Researchers have tested Yunus’s narrative of entrepreneurial transformation and found it wanting, but the tests are too narrow because Yunus’s narrative is too narrow.

Washington, D.C. 1986

To unspool Yunus’s vision and explore alternatives, it is helpful to go back to the 1980s when the modern incarnation of microfinance first emerged on the global scene. Transcripts from congressional hearings about foreign assistance provide a useful record of early public conversations in the United States. In February 1986, for example, Rep. Stan Lundine of New York convened a joint meeting of the House Select Committee on Hunger together with a subcommittee of the Committee on Banking, Finance and Urban Affairs. The hearing took place in a high-ceilinged, wood-paneled chamber within the maze of the Rayburn House Office Building, the block-sized office complex flanking the U.S. Capitol. The topic was “Microenterprise credit” — not yet shortened to “microcredit” — and Yunus was the featured guest. At the time, he was a little-known Bangladeshi economist who, three years before, had received a special license to create Grameen Bank. The Ford Foundation, an early backer, paid to bring Yunus to Washington.

When international development was on the agenda, the usual focus was on government-to-government foreign assistance, but Doug Bereuter, a moderate Republican from Nebraska, started the meeting by noting that this was an unusual event. “Some may find it strange,” Bereuter began, “that two congressional committees are meeting to discuss such things as news-vendor cooperatives in the Dominican Republic … or a sandal maker in Dacca [sic]. But perhaps it may not sound so esoteric when one realizes that one-half to three-quarters of the developing world’s population consists of underemployed people working in the so-called informal sector.” It was this population — systematically excluded from the banking sector and limited in their access to working capital — that Yunus sought to serve. He explained to representatives that banks “refuse to open their doors to the poor people who cannot provide collateral” and that “giving money to the poor is not their cup of tea” (U.S. House of Representatives: 4)

Yunus relayed his own story to the assembled legislators, starting with the “frustrations after frustrations” that befell Bangladesh after independence in 1971. Yunus was an economics professor at Chittagong University on Bangladesh’s southern coast when in 1974 the country experienced a deep famine. Yunus set out to create an informal economic study, taking his students to a nearby village to learn about the villagers’ lives and needs. Yunus concluded that the villagers’ business problems were fundamentally credit problems:

One of the things which struck me, was that it is very hard for people to make a living, because the circumstances and environment do not support their income-generating endeavors.

One woman I met in that village near Chittagong University was working all day to make bamboo stools. At the end of the day she made only 2 pennies. My trained mind in economics could not accept the propopsition that one could work all day to build bamboo stools and make only 2 pennies.

On closer scrutiny, I found that it is because she did not have the small amount of money to buy the bamboo to make the bamboo stool, so she borrowed the money from the trader who will buy the final product, the bamboo stool, from her. As a result, the trader dictated the price, which barely equaled the cost of the raw materials.

So, it came to my mind that I should make a list of such persons in that particular village who were borrowing from the trader just to make things and make a living for themselves and how much money they are borrowing from the trader.

I had a student of mine with me and we prepared a list of 42 such persons. The total amount they borrowed from the traders, different traders, totaled 856 taka, which is barely a total amount of $26. I felt extremely ashamed of myself being part of a society which could not provide $26 to 42 able, skilled human beings who were trying to make a living. (U.S. House of Representatives: 4)

Yunus’s impulse was humanitarian and focused on the villagers’ immediate burdens. These early observations suggested to Yunus the possibility of a kind of emancipation. The stool-maker would gain freedom from the middleman’s usurious loans. The rickshaw puller could buy his own rickshaw and avoid handing over the bulk of his earnings as rent for the vehicle.

The story holds power — but only under strong assumptions. Stripped to its essence, the story constructs a narrow view of the poor as fundamentally entrepreneurs (or would-be entrepreneurs) with pent-up productive power, held back only by the lack of capital. What is left unsaid and unexamined is the possibility that some villagers instead see themselves as would-be employees rather than would-be entrepreneurs — and they might then benefit most from the introduction of a large employer with the capacity to offer steady employment. Nor is there recognition of a failure in the goods market that might instead be met by increasing competition for monopolist middlemen. Nor is there recognition here that financial tools are necessary to facilitate spending, not just fund investment.[1]

The view of microfinance underlying Yunus’s depiction often is defended using a version of the idea (if not the language) of diminishing marginal returns to capital, an Economics 101 mainstay. The idea as applied to microfinance has the pleasure of being simultaneously intuitive and counterintuitive. The main idea (see fig. 1) is that the first increments of capital obtained by a business will generate the largest gains in profit. These are the loans that support an entrepreneur’s best, most-underfunded ideas. As a business acquires more capital, entrepreneurs move to their next-best ideas, then their next-next-best ideas, and so on. This part proceeds as
logic.

Figure 1. The Return to Capital (Case 1: Diminishing marginal returns to capital). Entrepreneurs who start with little capital generate far more additional profit than those who start with more capital.

The counter-intuitive part springs from the next step: the simplified story results in starved-for-capital micro-enterprises served by Grameen Bank generating far higher profit (r₁) from a given investment (an increase from A to B in fig. 1) than by the larger, established businesses served by traditional banks. The gain in profit for entrepreneurs that are already well-funded is just r₂ when their capital increases by the same amount (i.e., an increase from C to D).

Rep. Lundine captured this notion in remarks at the hearing, as he described the dynamism of the “microentrepreneurs” served by Grameen Bank:

Microentrepreneurs very much represent the private sector in developing countries. In fact, it is this segment of the private economy in these countries which is the most dynamic and which represents the greatest potential for economic growth. Economic growth from the bottom up benefits precisely those who have the greatest need and therefore the most to gain, the poorest of the poor. (U.S. House of Representatives: 1-2).

The assumption that poor microentrepreneurs have the “greatest potential for economic growth” also means, according to the logic, that the poor can pay high interest rates and still come out ahead. In fact, they can pay far higher interest rates than larger businesses (since r₁ >> r₂). Assumptions are thus inverted: The poor can pay more because they are poor and excluded. The poor can profit more because they are poor.

In short, Yunus’s story implies that if you can find a way to reach the poor, their gains (and the bank’s gains) can be high. Yunus reported to the legislators that Grameen Bank had grown steadily, earned profit for the past two years, and recovered loans at a rate “near 99 percent.”[2] Yunus’s contribution was to find a way to reach the poor cheaply enough that revenue from interest could cover the costs. Grameen Bank did that by serving villagers at group meetings and having the villagers themselves play a role in monitoring each other and determining creditworthiness (Cull et al. 2018).

The cost-cutting part of Yunus’s depiction increasingly was relevant to its success. By the time of Yunus’s visit to Congress in 1986, the IMF and World Bank were preoccupied by the fiscal imbalances in developing economies, which ultimately pushed the IMF and World Bank to force high-debt countries to cut budgets in order to service foreign debt, often by slashing social spending. In that light, it was unsurprising that Representative Bereuter highlighted that support of microcredit was inexpensive for donors (especially relative to building bridges and railways). In almost poetic terms — “given today’s budgetary reticence” — Bereuter had noted that “the large drop in new investments in the developing world” made “small credits to viable microbusinesses seem to be an optimal way to generate new income and jobs” (U.S. House of Representatives 1986). Microcredit thus also had the advantage of seeming like a cheap way to do something for the poor. The donors only were called upon to provide startup funding and basic infrastructure.

Another poetic contrivance created an additional reason for turning to microfinance: the rathole. This metaphor was invoked most famously in the 1990s by Sen. Jesse Helms, a Republican from North Carolina and chairman of the Senate Foreign Relations Committee, to depict what he saw as a transfer of taxpayer funds overseas with seemingly little accountability and no clear metrics of impact. To Helms, foreign assistance mainly disappeared down “foreign ratholes” never to be seen again. But with microfinance the market promised to provide accountability. Surely customers wouldn’t pay Grameen Bank for loans — with 16 percent interest at the start — if the services were not making a difference. Plus, surely the loans would not be repaid “nearly 99 percent” of the time if the money was being wasted. The market, hallowed in Reagan’s 1980s, thus was positioned as both a delivery mechanism and an accountability guarantee. Evidence of sustained demand for microcredit and high repayment rates became the prime indicators of success. Other interventions, like public schools and hospitals or road projects, could not claim such easy metrics.

All else is not equal

The world, though, doesn’t necessarily look like figure 1. There are tradeoffs and complexities in practice and, like so much else in economics, the relationship captured by the simple textbook case requires that we assume ceteris paribus — “all else is held equal.” The assumption is not trivial here. People who start with vastly different amounts of capital also are likely to be different in other ways. Poor entrepreneurs are less likely to have relevant skills and connections. The bamboo-stool maker probably is hindered by more than the lack of financial access. She also may lack the trade connections or marketing skills to sustain a scale of business necessary to reap large returns. The story changes dramatically (see fig. 2) when the analysis is expanded to take into account how economies of scale can matter. Here, the poorest entrepreneurs (i.e., those in the left-most section increasing capital from A to B) generate little extra profit with a given increment of extra capital (for lack of scale and perhaps lack of other inputs beyond capital), while better-off entrepreneurs are positioned to reap the rewards of their size (as they increase capital from C to D). Here, r₁ << r₂. The poorer entrepreneurs in this second case are unable to profit much, unable to pay high interest rates, and need a lot more than capital if they are to materially move forward.

Figure 2. The Return to Capital (Case 2: Returns to Scale in Capital Investment). Entrepreneurs who start with little capital generate less additional profit than those who start with more capital.

The assertion that village economies look more like figure 1 than figure 2 — i.e., that diminishing marginal returns is a more powerful effect than increasing returns to scale — set too high a bar for the expectations of microfinance impacts. A stack of statistical studies now shows that village economies are a mix and plenty of residents are in the figure 2 world, ill-prepared to gain much from petty business. For them, the notion of microcredit as a simple device, always capable of delivering impact on its own, falls away. Gone is Yunus’s case that anyone can succeed in business once given access to a bit of capital.

Microfinance as a credit card?

What then is the role for microfinance? Why do poor people stick with it? Why does it continue to grow by the year? To answer these questions, it’s helpful to start with an anomaly: In practice, microfinance activity more closely resembles the provision of consumption loans than business loans, revealing a different picture of the financial needs — and financial lives — of poor households. The rhetoric around microfinance obscures the reality that borrowers are consumers, too, and what many often seek is simply better ways to spend, not just to invest in business.

Like typical consumer loans — and like credit cards — microfinance loans allow borrowers to make big purchases and repay over time (with interest). Grameen-style microfinance loans require that loans are repaid steadily through weekly installments, a structure that looks more like a typical consumer loan than a business loan. (In contrast, a typical business loan would allow borrowers to invest the funds and only much later, once profit has been generated, repay the loan with the accumulated revenues.)

Recent village studies, especially those using the close observations of financial diaries methods, show that loans are desired and used for many purposes beyond business. Incomes are seldom steady and predictable; needs vary as well: families need to pay for schools, medicines, and food during slow periods. They might need to buy bus tickets to get to the city for a job, upgrade their homes, or simply pay down a more expensive loan. Borrowers repay the loans in small bits using whatever household income is available. Stuart Rutherford’s financial diaries from Bangladesh, included in the book Portfolios of the Poor, reveal many such examples (Collins et al. 2009). Rutherford spent time with a small group of Grameen Bank customers and found that only half of “business” loans were used for business purposes (and under half when weighted by the size of loans). I found the same in a national survey in Indonesia (Johnston and Morduch 2008), and others reveal similar patterns in India, Peru, and elsewhere.

Evidence that microfinance loans are used to fund non-business needs (even if for education or health) is sometimes used to criticize microfinance, but that misses the point. As Collins et al. (2009) argue, microfinance in practice can add critical sources of finance that can be added to other funds used to manage day-to-day cash flows, accumulate large sums for lumpy expenses (including investment), and cope with risk. In a wide variety of situations, microfinance loans can be relied on to help liquidity-constrained households put together the money they need at the moment they need it. The result may be to improve the families’ situations, even if their businesses don’t grow and incomes do not rise (even if they don’t actually have a business!). The notion that business finance is the single, main need for finance for poor households does not square with the evidence. Rather, poor families, like richer families, need broad financial tools. In fact, the poor may need them more urgently.

If we drop the illusion that microfinance loans are necessarily business loans (and the assumption is dropped that everyone is a budding entrepreneur), it is easier to see how microfinance works. It becomes easier to see how microfinance addresses the challenges posed by the illiquidity of borrowers. And it becomes easier to anticipate (and more directly address) problems such as over-indebtedness and the lack of adequate consumer protections in the sector (see Guérin et al. 2015 and Karim 2011). It also is easier to see that microfinance is a complement to — not a substitute for — social insurance and other interventions that bring public resources into poor communities.

Ultimately, Yunus’s talking points were, if anything, too easily appealing in their moment. Microfinance is instead best thought of as a device like a credit card: it can be very helpful, sometimes harmful, and seldom truly transformative. Microfinance loans differs from credit cards in important ways too; they are fixed loans, not lines of credit, and they have clear rules and structures that make it more difficult — but not impossible — to get into real trouble with debt. Only with a sharper understanding of how microfinance is actually used can providers develop better options and safeguards. This vision of microfinance may not sell as well to donors, but it may describe the device that families most need and value.

References

Armendàriz, Beatriz and Jonathan Morduch. 2010. The Economics of Microfinance, Second edition. Cambridge, MA: MIT Press.

Bateman, Milford and Ha-Joon Chang. 2012. “Microfinance and the Illusion of Development: From Hubris to Nemesis in Thirty Years.” World Economic Review 1: 13-36.

Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. 2009. Portfolios of the Poor: How the World’s Poor Live on $2 a Day. Princeton, NJ: Princeton University Press.

Cull, Robert, Asli Demirgüç-Kunt, and Jonathan Morduch. 2018. “The Microfinance Business Model: Enduring Subsidy and Modest Profit.” World Bank Economic Review, forthcoming. Available at link.

Ferguson, James. 2015. Give a Man a Fish: Reflections on the New Politics of Redistribution. Durham, NC: Duke University Press.

Guérin, Isabelle, Labie, Marc and Servet, Jean-Michel. 2015. The Crises of Microcredit. London: Zed Books.

Johnston, Don Jr. and Jonathan Morduch. 2008. “The Unbanked: Evidence from Indonesia.” World Bank Economic Review 22 (3): 517-537.

Karim, Lamia. 2011. Microfinance and Its Discontents: Women in Debt in Bangladesh. Minneapolis, MN: University of Minnesota Press.

Mossman. Matt. 2015. “Moving Beyond Microcredit.” The New Yorker. November 2, 2015.

U.S. House of Representatives. 1986. “Microenterprise Credit.” Hearing of the Select Committee on Hunger and Subcommittee on International Development Institutions and Finance, Committee on Banking, Finance, and Urban Affairs. February 25, 1986. Available at link.

Notes

[1] Grameen Bank eventually created loan products to support a limited range of spending needs, especially for major housing and education costs. Their main loan product, though, has always been described as a business loan, despite evidence that it is often used in broader ways.

[2] Grameen Bank’s achievements are impressive, but claims about profits and loan recoveries are overstated when viewed from the perspective of generally-accepted accounting principles; instead, my calculations show that Grameen was reliant on subsidy from the start (Armendàriz and Morduch 2010). For an updated view of the continuing dependence on subsidy in the broad microfinance industry, see Cull et al. (2018).