Article by Abidemi Edited by Kornekt & Frank America Cover Art by Chameleon

What passes for public goods in Africa remains uncertain as most public sectors are underdeveloped; the standard idea of public goods does not apply in several developing nations. This article explores what public goods are, how coordination failure and other issues have distorted this meaning in Africa, and how decentralized networks like the blockchain can help us course correct.

Web3 is fascinating because of all it has to offer. There is so much to learn about — blockchain technology, NFTs, decentralized finance, cryptocurrencies, and much more. Over the past seven months of my learning adventure, the most fulfilling part has been getting involved in DAOs like GitcoinDAO, BanklessDAO, and a couple of others.

A DAO is like a Facebook group where anyone can join and engage with others except, in this instance, members are also involved in how the group operates, including helping to define the rules around their operation. In essence, a DAO is an open community with a shared purpose where decision making and day-to-day operations are done by community members or anyone interested in becoming a member. This is a new development in organizational behavior.

Gitcoin was my first introduction to DAOs. It is a community invested in building and funding digital public goods like open-source software. I was still early in my web3 research when I stumbled on their website. I filled out a contributor application form which got accepted about a week later, then I got onboarded the next day and found my contributor path. Getting into Gitcoin has raised my awareness of many economic and coordination issues such as the tragedy of commons and the free rider problem. It has also caused me to become a lot more invested in learning, teaching, and funding public goods.

Let’s take a look at what public goods are and how they fit into the African context.

Public goods are goods or services that benefit every member of society regardless of race, ethnicity, language, wealth, or education. For a good to be considered a public good, it has to remain non-rivalrous and non-excludable. Clean air is one example of a public good. Your consumption of air (by breath) cannot stop anyone else from breathing the same air (non-excludable), and neither does it deplete the quality or amount of air left (non-rivalrous).

Streetlights are another example of a public good. John’s use of the streetlights doesn’t prevent Sarah from using it. Likewise, every other person can use it without it depleting or reducing in quality; this makes it non-rivalrous. A piece of plantain in this instance isn’t a public good as it’s rivalrous and excludable. If John eats a piece of plantain, Sarah cannot also consume that same piece. The scenario is the same for a piece of furniture, a cell phone, or an airline ticket — they’re owned and used exclusively.

Several other examples of public goods include public healthcare, national security, education, public libraries, scientific and academic research, and water supply.

While public goods are non-excludable and non-rivalrous, in an interconnected community with shared use and consumption, the question remains, how and who ensures they’re adequately maintained? Everyone participates in the consumption of public goods such as clean air, yet, only a few — usually referred to as climate activists — dedicate time and resources to its maintenance and sustainable consumption. This is popularly referred to as “the free rider problem”.

💡 It is considered an example of a market failure. That is, it is an inefficient distribution of goods or services that occurs when some individuals are allowed to consume more than their fair share of the shared resource or pay less than their fair share of the costs — Investopedia.

Wikipedia use is another classic example of people free-riding on a public good. As a free encyclopedia maintained by contributors and volunteers who remain unpaid, Wikipedia provides all branches of knowledge to the general public at no cost. Wikipedia records 41.4 million registered English language users and 5.1 billion unique global visitors monthly, yet, only over a million users donate to the knowledge resource.

Other forms such as “everyone should do their bit” or fairness and equality norms can also help to increase private contributions to public goods. People might simply think that it is morally wrong to free ride (Sugden 1984). Social norms can motivate people to act altruistically but also help to solve coordination problems by specifying property rights and the terms of contracts (Young 1998).

As long as people continue to benefit or get rewarded from non-action and non-cooperation, free riding will always persist. There are ways to ensure users of public goods contribute to its funding and sustenance like tax collection, state regulation, and social pressure. Gitcoin, through blockchain technology, also provides an alternative funding mechanism for public goods. Using a unique funding mechanism called quadratic funding, Gitcoin ensures projects with the most impact get the most support. Learn more about Gitcoin’s quadratic funding and explore public goods projects that need your support.

Approaching public goods through the African lens is difficult because what passes for public goods in the traditional context and the developed nations do not apply in most parts of Africa. Many of the public goods enjoyed by citizens of developed countries are excludable and rivalrous in Africa.

In most parts, public goods such as pipe-borne water, clean air, good roads, and education are left unprovided and in areas where they are provided, there’s often very little maintenance by the government. The provision, financing, and maintenance of such public goods, which are the government’s responsibility, are often neglected. This gap has created room for private firms and individuals to swoop in and provide these goods with profit maximization, not public benefit, as their primary motivation.

Not to overgeneralize, public goods remain relative to context and country. In Nigeria, for instance, road transport union officials illegally lease out roadsides, curbs, and walkways to traders and hawkers who then use those spots to display their goods and wares for sale for most of the day. This not only causes traffic and environmental pollution, traders also often harass passersby for “standing in front of their shops” which again, are by the roadsides. This turns roadsides and curbs, which should be a public good, into a private good (you cannot access or use the roadsides unless you purchase a good from them).

This is a clear instance of how corruption, lax law enforcement, and a lack of smart urban planning give way to members privatizing a public good, thereby excluding others from enjoying it. There’s little to no incentive for good behavior from law enforcement agencies, nor penalties for said traders, and as such, several roadsides in Nigeria have become a rivalrous semi-public good.

Electricity is another public good inaccessible to most Africans. According to the IEA, (a sustainable energy organization), sub-Saharan Africa’s share of the global population without access to electricity rose to 77% from 74% before the pandemic. In these regions, people resort to alternative sources of electricity like generators or solar power, leaving the economically challenged with no access to a public good like electricity.

A 2015 publication by Washington Post provides more insight into how public goods in Africa are not exactly available to the public. Eight years later and most of it still rings true for sub-Saharan Africa.

From the Post: “Danielle Kushner shows how racial groups in South Africa depend on different kinds of security. Whites and Asians are more likely to hire private armed guards for protection, while Blacks and Coloureds join together with friends and local groups to guard their families and communities. While the majority of “the public’’ might rely on faith-based schools (Aremu), private clinics (Katusiimeh), and private security (Kushner), not everyone can get into or afford these schools and clinics, or use these security services. In Kenya and Uganda, MacLean and Brass find that hybrid NGOs and businesses struggle to extend affordable electricity to the rural poor. This uneven access to public goods often leads to fights over who gets an education, healthcare, protection, and light.”

On the surface, it seems like a clear case of corruption and misappropriation of public funds by African leaders, but at its core, it’s a representation of how operating in centralized systems and networks can affect a nation’s public goods provisions. These parts of Africa suffer from a lack of coordination and also an absence of a distributed and immutable public ledgers such as the blockchain. This is what draws me to the incredible coordination mechanism that is at Gitcoin. It presents Africa and the world, not just with the option of funding regenerative goods in a decentralized manner, but, most importantly, it forces us to take a more profound look at global and regional problems as institutionalized and benefiting/rewarding only a few.

It’s time to press on the agenda and emphasize the importance of public ownership of public goods, and the value of working together collaboratively, not competitively.

Author Bio

Abidemi is a growth marketer and community builder currently interested in the intersection between web3 and venture funding. When she’s not building coordination mechanisms within decentralized organizations, she’s researching, creating, and managing content.

Editor Bios

Kornekt is a writer and editor with strong conviction in the world web3 creates.

Frank America is the Editor-in-Chief of The Rug News, and a Content Manager at Bankless Publishing.

Designer Bio

Chameleon is a designer and creator in the web3 space.

BanklessDAO is an education and media engine dedicated to helping individuals achieve financial independence.

This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and that you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.

Bankless Publishing is always accepting submissions for publication. We’d love to read your work, so please submit your article here!

More Like This

The Centralization Paradox Limiting DAOs by Kornekt

The Rise of Stablecoins in Africa by Bankless Africa

Tally’s Community-Owned Crypto Wallet is a New Web3 Public Good by Hiro Kennelly

Article by Abidemi Edited by Kornekt & Frank America Cover Art by Chameleon

What passes for public goods in Africa remains uncertain as most public sectors are underdeveloped; the standard idea of public goods does not apply in several developing nations. This article explores what public goods are, how coordination failure and other issues have distorted this meaning in Africa, and how decentralized networks like the blockchain can help us course correct.

Web3 is fascinating because of all it has to offer. There is so much to learn about — blockchain technology, NFTs, decentralized finance, cryptocurrencies, and much more. Over the past seven months of my learning adventure, the most fulfilling part has been getting involved in DAOs like GitcoinDAO, BanklessDAO, and a couple of others.

A DAO is like a Facebook group where anyone can join and engage with others except, in this instance, members are also involved in how the group operates, including helping to define the rules around their operation. In essence, a DAO is an open community with a shared purpose where decision making and day-to-day operations are done by community members or anyone interested in becoming a member. This is a new development in organizational behavior.

Gitcoin was my first introduction to DAOs. It is a community invested in building and funding digital public goods like open-source software. I was still early in my web3 research when I stumbled on their website. I filled out a contributor application form which got accepted about a week later, then I got onboarded the next day and found my contributor path. Getting into Gitcoin has raised my awareness of many economic and coordination issues such as the tragedy of commons and the free rider problem. It has also caused me to become a lot more invested in learning, teaching, and funding public goods.

Let’s take a look at what public goods are and how they fit into the African context.

Public goods are goods or services that benefit every member of society regardless of race, ethnicity, language, wealth, or education. For a good to be considered a public good, it has to remain non-rivalrous and non-excludable. Clean air is one example of a public good. Your consumption of air (by breath) cannot stop anyone else from breathing the same air (non-excludable), and neither does it deplete the quality or amount of air left (non-rivalrous).

Streetlights are another example of a public good. John’s use of the streetlights doesn’t prevent Sarah from using it. Likewise, every other person can use it without it depleting or reducing in quality; this makes it non-rivalrous. A piece of plantain in this instance isn’t a public good as it’s rivalrous and excludable. If John eats a piece of plantain, Sarah cannot also consume that same piece. The scenario is the same for a piece of furniture, a cell phone, or an airline ticket — they’re owned and used exclusively.

Several other examples of public goods include public healthcare, national security, education, public libraries, scientific and academic research, and water supply.

While public goods are non-excludable and non-rivalrous, in an interconnected community with shared use and consumption, the question remains, how and who ensures they’re adequately maintained? Everyone participates in the consumption of public goods such as clean air, yet, only a few — usually referred to as climate activists — dedicate time and resources to its maintenance and sustainable consumption. This is popularly referred to as “the free rider problem”.

💡 It is considered an example of a market failure. That is, it is an inefficient distribution of goods or services that occurs when some individuals are allowed to consume more than their fair share of the shared resource or pay less than their fair share of the costs — Investopedia.

Wikipedia use is another classic example of people free-riding on a public good. As a free encyclopedia maintained by contributors and volunteers who remain unpaid, Wikipedia provides all branches of knowledge to the general public at no cost. Wikipedia records 41.4 million registered English language users and 5.1 billion unique global visitors monthly, yet, only over a million users donate to the knowledge resource.

Other forms such as “everyone should do their bit” or fairness and equality norms can also help to increase private contributions to public goods. People might simply think that it is morally wrong to free ride (Sugden 1984). Social norms can motivate people to act altruistically but also help to solve coordination problems by specifying property rights and the terms of contracts (Young 1998).

As long as people continue to benefit or get rewarded from non-action and non-cooperation, free riding will always persist. There are ways to ensure users of public goods contribute to its funding and sustenance like tax collection, state regulation, and social pressure. Gitcoin, through blockchain technology, also provides an alternative funding mechanism for public goods. Using a unique funding mechanism called quadratic funding, Gitcoin ensures projects with the most impact get the most support. Learn more about Gitcoin’s quadratic funding and explore public goods projects that need your support.

Approaching public goods through the African lens is difficult because what passes for public goods in the traditional context and the developed nations do not apply in most parts of Africa. Many of the public goods enjoyed by citizens of developed countries are excludable and rivalrous in Africa.

In most parts, public goods such as pipe-borne water, clean air, good roads, and education are left unprovided and in areas where they are provided, there’s often very little maintenance by the government. The provision, financing, and maintenance of such public goods, which are the government’s responsibility, are often neglected. This gap has created room for private firms and individuals to swoop in and provide these goods with profit maximization, not public benefit, as their primary motivation.

Not to overgeneralize, public goods remain relative to context and country. In Nigeria, for instance, road transport union officials illegally lease out roadsides, curbs, and walkways to traders and hawkers who then use those spots to display their goods and wares for sale for most of the day. This not only causes traffic and environmental pollution, traders also often harass passersby for “standing in front of their shops” which again, are by the roadsides. This turns roadsides and curbs, which should be a public good, into a private good (you cannot access or use the roadsides unless you purchase a good from them).

This is a clear instance of how corruption, lax law enforcement, and a lack of smart urban planning give way to members privatizing a public good, thereby excluding others from enjoying it. There’s little to no incentive for good behavior from law enforcement agencies, nor penalties for said traders, and as such, several roadsides in Nigeria have become a rivalrous semi-public good.

Electricity is another public good inaccessible to most Africans. According to the IEA, (a sustainable energy organization), sub-Saharan Africa’s share of the global population without access to electricity rose to 77% from 74% before the pandemic. In these regions, people resort to alternative sources of electricity like generators or solar power, leaving the economically challenged with no access to a public good like electricity.

A 2015 publication by Washington Post provides more insight into how public goods in Africa are not exactly available to the public. Eight years later and most of it still rings true for sub-Saharan Africa.

From the Post: “Danielle Kushner shows how racial groups in South Africa depend on different kinds of security. Whites and Asians are more likely to hire private armed guards for protection, while Blacks and Coloureds join together with friends and local groups to guard their families and communities. While the majority of “the public’’ might rely on faith-based schools (Aremu), private clinics (Katusiimeh), and private security (Kushner), not everyone can get into or afford these schools and clinics, or use these security services. In Kenya and Uganda, MacLean and Brass find that hybrid NGOs and businesses struggle to extend affordable electricity to the rural poor. This uneven access to public goods often leads to fights over who gets an education, healthcare, protection, and light.”

On the surface, it seems like a clear case of corruption and misappropriation of public funds by African leaders, but at its core, it’s a representation of how operating in centralized systems and networks can affect a nation’s public goods provisions. These parts of Africa suffer from a lack of coordination and also an absence of a distributed and immutable public ledgers such as the blockchain. This is what draws me to the incredible coordination mechanism that is at Gitcoin. It presents Africa and the world, not just with the option of funding regenerative goods in a decentralized manner, but, most importantly, it forces us to take a more profound look at global and regional problems as institutionalized and benefiting/rewarding only a few.

It’s time to press on the agenda and emphasize the importance of public ownership of public goods, and the value of working together collaboratively, not competitively.

Author Bio

Abidemi is a growth marketer and community builder currently interested in the intersection between web3 and venture funding. When she’s not building coordination mechanisms within decentralized organizations, she’s researching, creating, and managing content.

Editor Bios

Kornekt is a writer and editor with strong conviction in the world web3 creates.

Frank America is the Editor-in-Chief of The Rug News, and a Content Manager at Bankless Publishing.

Designer Bio

Chameleon is a designer and creator in the web3 space.

BanklessDAO is an education and media engine dedicated to helping individuals achieve financial independence.

This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and that you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.

Bankless Publishing is always accepting submissions for publication. We’d love to read your work, so please submit your article here!

More Like This

The Centralization Paradox Limiting DAOs by Kornekt

The Rise of Stablecoins in Africa by Bankless Africa

Tally’s Community-Owned Crypto Wallet is a New Web3 Public Good by Hiro Kennelly