“Winners Take All” and Financial Inclusion: Would the World Be Better Off If We Weren’t in It?

We may be exactly the type of organization Giridharadas criticizes.

Credit: TED Conference/CC BY-NC 2.0

Imagine a large pie sitting on a table. The guests are hungrily eying it, and it’s time to dig in. One person lunges forward with his fork, grabbing the majority of the pie. After a brief pause, he looks around the room at dozens of hungry faces and offers up the small remainder. He mentions some leftover ingredients to make more pie in the kitchen, if anyone wants. Then, he sits down, patting himself on the back for his generosity.

This scenario illustrates the dynamic at the heart of a book that’s grabbed the attention of the international development community: Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas. He charges that the “winners” of the world, who have a disproportionate majority of the world’s proverbial pie, don’t seem to realize that their efforts to “do good” are not only too small but also serve to reinforce the status quo and their own privileged positions.

When plutocrats are charged with making change, their modus operandi is not structural reform, Giridharadas argues. They fail to address the roots of inequality, instead attacking the symptoms of large, systemic issues. Giridharadas calls instead for robust democratic institutions that work to provide everyone with an equitable share.

Organizations Like Ours in the Crosshairs

Giridharadas notes how often interventions backed by the “haves” embrace market logic, aimed at “empowering” low income individuals to “pull themselves up by the bootstraps.”

The last sentence sounds familiar. We in financial inclusion do just that: we aim to empower low-income individuals. What’s more, we at the Center for Financial Inclusion are funded by large financial organizations. Giridharadas might regard CFI as exactly the type of organization that is part of the problem.

But we see it differently.

Where Giridharadas sees superficial gestures, we see a process of fundamental change. The financial inclusion movement represents structural change in the way the financial system operates. Over the course of only a couple of decades, it has been opening a system previously only available to elites to now also serve the emerging middle class, the near poor, and the poor across the globe. The movement involves myriad players that work together in complex ways to build a financial system that is accessible to everyone who needs and can use financial services. These players include governments – especially financial regulators, but also social service agencies, telecoms regulators, etc. – and the private sector – banks, fintechs, microfinance institutions, telcos and others. The change, especially given the technology juggernaut that underpins it, has tremendous momentum.

Where Giridharadas sees superficial gestures, we see a process of fundamental change.

This is where CFI comes in. Our specific challenge is to ensure that the emerging system genuinely benefits its new users. As we often say, CFI challenges and engages the industry to better serve, protect and empower customers.

We attempt to look at financial services through the eyes of consumers, and we see that the newly-included require special attention, because they may face disadvantages including personal and business vulnerabilities, lower education, and social exclusion (like gender biases). That’s why we have been exploring financial capability interventions that can build a person’s ability to use financial services well. The focus of our work through the Smart Campaign is to ensure that financial service providers embrace sound consumer protection practices adapted to lower income populations – for example, transparency that goes beyond required information disclosure to confirm customer understanding. Our Client Voice research is intended to make sure the experiences and concerns of clients inform all financial inclusion actors whether they are designing regulations or financial products. And our work on financial health keeps a focus on the ultimate purpose of financial inclusion: supporting customers to live healthy financial lives.

Giridharadas doesn’t explicitly mention financial inclusion in this book, and no one could blame him, since there’s so much ground to cover. However, we would be curious to get his take on it.

Our own take is that the financial system isn’t going away anytime soon, barring a complete reorganization of modern society – so the best strategy is to work within the system to make it as socially beneficial as it can be. Indeed, we recognize that clients, businesses, and the finance industry as a whole inhabit an ecosystem in which those with power must commit to shouldering the bulk of efforts to produce long-term, systemic change. We would love to see more financial institutions achieve Smart Certification. We would also like to see more and more financial institutions strengthen their governance practices in favor of customers – which is why the top requirement of our Africa Board Fellowship program has been for board fellows to talk face to face with customers.

“A charitable interpretation of this idea is that the world deserves to benefit from flourishing business. A more sinister interpretation is that business deserves to benefit from any attempt to better the condition of the world.”
Giridharadas on doing good and doing well

Although Giridharadas has written a hard-hitting volume that maximizes impact with forceful storytelling, he only completes half of his task. He’s got a critique, but lacks specific, implementable ways to address societal inequalities. Much of what Giridharadas proposes in international development can at best be described as nebulous.

We need to be continually learning, raising questions, and seeking feedback about best practices in financial inclusion.

Perhaps the greatest service Winners Take All provides is to remind us that in this line of work, humility is key. No one has all the solutions, and even the best of our efforts can lead to unexpected results. We need to be continually learning, raising questions, and seeking feedback about best practices in financial inclusion. And we must take time for self-reflection, recognizing that we all – those who agree with Giradharadas and those he criticizes – must be cognizant of our own biases and consider how those biases affect our decisions.

Thank you for sparking the debate, Anand. Let’s keep working to make sure that the next time the wealth pie is placed on the table, everyone gets a fair share.

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