| September 27, 2010

An Answer to a FAQ – “Why the Developing World”


Worldreader.org has offices in both the US and Spain and sometimes we get asked, “Why not do this here? We have poverty right here in our own country.”  It’s a fair question, and the answer is twofold.

1) The need is greater

While there are many people in developed countries who cannot afford to buy books, almost every person has access to books through community libraries, schools and used/discount bookstores.  Because of this access to books and education, the US and Europe enjoy a 99% literacy rate, among the highest in the world.  Contrast this with the developing world, where most people have limited to no access to books.  No libraries.  No books in school.  No bookstores.  The result is extremely low literacy rates: in some countries upwards of 50% of the population are illiterate.  The lack of books in developing countries is not a new problem. Well-meaning charities have been addressing this problem for decades in the only possible way that existed – by collecting and shipping books abroad.  But books are expensive to transport and distribute.  They get lost, damaged and destroyed.  They often never arrive to remote areas. The few books that do arrive are often not the ‘right’ books for the local culture.

Presby Junior High–one of the four schools selected for the upcoming iRead trial.

E-reader technology changes the game completely.  Now, with a simple device, people anywhere in the world can have instant access to millions of books, many of them free of charge. They can choose the books they want to read, in the language they want to read in. The old problem of lack of books can be most easily solved with this new technology.

2) Intervention is necessary

In the developed world competition and the free market will ensure that all segments of the population have access to this new technology, whether privately or through schools and libraries.  There will be a vast array of devices, ranging from sexy (iPad) to basic (free e-reader apps for mobile phones).  But the very place where this technology has the potential to have the greatest impact, might be the very place left behind in this colossal leap forward.  Free markets do not always guarantee optimal social outcomes, especially when dealing with a social good such as literacy. Developing countries are characterized by poor infrastructure, lack of competition and extreme poverty, all contributing to a high chance of market failure.

We recently spoke to leading global strategist Pankaj Ghemawat, who is currently writing a book about market failures.  Ghemawat asserts that the social benefit derived from e-reader technology in developing countries–a culture of reading–is an enormous externality that is hard for markets to internationalize and that nonmarket interventions are therefore required to ensure that the world’s poorest people can benefit from such technologies.

Video of Pankaj Ghemawat talking to Worldreader.org

The intervention proposed by Worldreader.org is partially in the form of a short-term subsidy.  Although the device prices are coming down fast, they are nowhere near cheap enough to be affordable to people in developing countries.  So in the short term, and with the generous help of our partners and supporters, we will provide the devices and the content free of charge.  In the medium term, as prices come down further and as governments see measureable benefits, both social (increase in literacy) and economic (cheaper and easier distribution of books and materials), the free market will take over and further subsidies will be unnecessary.  And as the simple rule goes: if we can prove that this works in the most challenging areas, it will work anywhere.  When this happens, there will finally be “Books for All.”