Shoes & Solutions

Tomorrow, April 21, 2015, students across the campus of Northwest Missouri State, my Alma mater, will forego shoes in an effort to raise global awareness for children’s health and education. Organized by Toms Shoes, men and women across the United States will take off their shoes to alert their peers about the impact of shoes on a child’s life.

Beyond the stinking feet and the “no shoes, no service” ban in the student cafeteria, “One Day Without Shoes” is causing many problems.

It’s not just “One Day Without Shoes,” but the entire Toms buy-one-get one model.

In 2006, Toms was created to solve a social problem: children without shoes. While visiting Argentina, Blake, the company’s founder, saw this issue and had a vision for a business model. For every shoe it sells, Toms gives one away to a barefoot child in a developing country.

This sounds like a wonderful, charitable organization. “What’s wrong with giving away shoes to needy children?” you may ask.

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In fact, in giving away shoes, Toms is actually undermining local economies by providing a short-term solution to a long-term problem. By undercutting local prices, Toms is hurting local manufacturers, distributors, and sellers of shoes.

As Time noted, “an increasing number of foreign aid practitioners and agencies are recognizing that charitable gifts from abroad can distort developing markets and undermine local businesses by creating an entirely unsustainable aid-based economy.”

Contrary to popular belief, Toms isn’t actually a company designed to build the economies of the developing world. As a for-profit company, it would be unable to sustain revenues under this business model. In reality, Toms’ model is built on making western consumers feel good.

Unfortunately, western consumers feel good at the expense of children in the developing world.

But what’s the solution to this issue? As a Peace Corps Volunteer, you may think I have all the answers to these development questions. However, in all actuality, I probably have more questions than you.

Let’s try to tackle this problem together.

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Firstly, let’s understand the issues. Toms points out that children without shoes are at risk of contracting hookworm and other foot diseases. But simply providing a pair of shoes will not eradicate hookworm. Only vibrant, local economies with knowledge about these problems will have the power to create real change.

Lack of shoes is not the problem.

Secondly, let’s consider different business models. Toms could build more manufacturing facilities in developing countries. Currently, Toms has six factories for the more than sixty countries it donates to around the world. That’s less than one factory for every ten countries.

More factories means more people are employed in local economies.

Over the course of the past couple decades, a new business had popped up all over Africa: the trade of second-hand clothes from more affluent Western countries. In Senegal, these small boutiques and market stands are called fukinjays.

Clothes arrive from the United States, Europe, and even some Asian countries in cargo containers. After arriving at the port, middle men purchase bales of clothes, break them down, and sell them to vendors around the region. After passing through many middle men, these hand-me-downs arrive in local markets.

Although it may appear as if this is just as damaging as Toms, this industry is actually boosting local economies.

Second-hand clothes sold in a market. Photograph: http://www.compassion.com/haiti/port-au-prince.htm

Second-hand clothes sold in a market. Photograph: http://www.compassion.com/haiti/port-au-prince.htm

In her book, The Travels of a T-Shirt in a Global Economy, Pietra Rivoli describes this as the only time in a T-shirt’s life that it encounters a truly free market.

A nice pair of khaki pants may be sold for $5, a local fortune, while the jersey of a losing sports team will fetch a lower price than that of a winning one.

Each unique item is sold at the equilibrium price – where both buyers and sellers are happy with the price and quantity – unlike when a T-shirt lives in the commodity markets of cotton and manufacturing. This industry is dominated by small entrepreneurs while large foreign firms face high barriers of entry.

Although this fukinjay system is controversial – a few African governments have banned it to protect local garment businesses – it creates many jobs, 24,000 in Senegal alone, while providing low-cost clothing and shoes for men and women and children across sub-Saharan Africa.

As you can see, dumping free shoes in developing countries won’t solve these problems. The fukinjay system may be a possible solution, while continued health education and job creation for entrepreneurs is surely in the best interest of developing countries as well as the entire global economy.

The impact of Toms in the developing world is only one of many ongoing debates within the international development community. Aid, whether in the form of roads, schools or maternal health is a constant subject of consideration at any world forum.

This blog post can’t even begin to touch on the many issues faced in local economies.

With all of my heart, I believe the wearers of Toms want to do good. This post isn’t meant to offend or do harm, but to invite you to join the international community in making our world a better place. At the end of this post, you can find further readings.

In light of this, tomorrow, keep your shoes on. Instead, let’s look for the solutions to improve the lives of children all over the world that businesses like Toms can provide in partnership with local economies.

And to look for solutions, you’re gonna need your shoes.

Further reading:

The Case of TOMS Shoes in El Salvador
The Impact of Second-Hand Clothing Trade on Developing Countries
The Economics of TOMS Shoes
Aid to the Rescue

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Soap and In-Scent-ives

Leading a soap training in a nearby village.

Leading a soap training in a nearby village.


Behavior change is one of the biggest challenges in development work, just ask any international aid worker, NGO employee, or Peace Corps Volunteer. But it’s not because people living in the third world are stupid, ignorant, or any other appalling stereotype. Indeed, behavior change is challenging because changing behavior, no matter whether you live in Africa or North America, is difficult.

Most people know that it’s good to wash your hand after using the bathroom, before eating, and while cooking. But do most people wash their hands at those critical times? No. Not Americans and not Senegalese.

There aren’t enough incentives.

Economics is all about incentives. Perhaps you thought economists only discuss stock markets and currency, and they do (the boring ones, anyways), but beneath bear and bull markets and inflation and deflation lies incentives.

Economists study the way people respond – or don’t respond – to incentives. What makes people behave the way they do? What makes people increase or decrease a certain behavior? And how can incentives change behavior?

Think about the last time you washed your hands. Why did you do it? Was it because you had just watched an Ebola update on the evening news? Had you recently changed your child’s diaper? Maybe your boss was also in the bathroom with you and you didn’t want to appear like a dirty person undeserving of a raise.

Although you may not remember why you washed your hands, you were most certainly responding to an incentive. The thought of tiny, microorganisms hanging out on your hands might have scared you into washing your hands. Maybe you could see dirt on your hands. Your boss’ presence was a huge incentive.

Or, maybe, someone paid you.

If you paid people to wash their hands, would hand washing increase? For $0.01, hand washing would probably decrease. If it’s worth only a penny, it must not be that important. For $1, hand washing would probably increase to 100%. If you wash your hands only five times a day, you would increase your annual salary by $1,825. Even Warren Buffet wouldn’t be able to ignore that incentive.

So, $1 is an effective incentive for hand washing.

However, it’s not very efficient. Obviously, no one (except maybe Warren Buffet) will begin handing out dollars for clean hands.

Most people in Senegal know that hand washing, saving money, and eating vegetables is good. They know that sleeping without a mosquito net, poor recordkeeping, and using pesticides is bad. Yet, somehow, Senegal is still considered a developing country.

And the West doesn’t understand this. If you educate people, they’ll change behavior, right?

Everyone knows that smoking, overeating, and driving without a seatbelt is bad. Yet, those exact behaviors happen every day in America. Clearly, education doesn’t automatically lead to behavior change.

Many people think my life in Senegal is glamorous. I’m supposed to be “saving the world” one starving baby at a time. But, truth be told, I haven’t seen one starving baby in the past nine months.

Since I’m not “saving the world,” am I saving my own host family?

No.

Why does my sister always cook with rice instead of healthier, cheaper grains? Why does my older brother buy a new iPhone but fail to pay school inscription fees for the children? Why does my little nephew refuse to wash his hands before meals?

But, then again, why do so many Americans eat processed food? Why do Americans take on a new car loan instead of saving their money to buy in cash? And why do one-third of Americans not wash their hands after going to the bathroom?

It’s not because Americans or Senegalese are uneducated. There just aren’t enough incentives.

This post isn’t going to end with a beautiful formula for behavior change. There is no three-step program for changing the world. If anyone tells you there is, they’re lying to you. When was the last time that new, fad diet worked for you?

There is, however, economics. Are there strong enough incentives for behavior change? What sort of social pressures would convince people to quit smoking? What sort of financial forces would persuade Senegal to join the developed world?

I’m not here to answer those questions. This is a discussion that will continue long after my Peace Corps service is over. But I’m here to invite you to join the conversation.

Next time you’re thinking about poor, starving children in Africa, instead, turn your attention to your overweight, chain-smoking neighbor. He or she needs your help just as much as the child in Africa.

Or, better yet, grab a bar of soap and wash your hands.

Are there enough incentives for you?