Rural markets are often vibrant places where people from all walks of life gather to buy and sell things. But look more closely and it’s clear that markets in some countries are not as inclusive as they at first seem.

In Bangladesh, for instance, women are excluded from most market activities. Because encouraging markets is taken for granted as a way to promote economic development, “What does it mean when many people, especially women, are not in a position or allowed by local norms and traditions to participate in markets?” asks Johanna Mair, a visiting scholar at the Stanford Center on Philanthropy and Civil Society.

Mair and her colleagues Ignasi Martí of the EMLYON Business School and Marc J. Ventresca of the University of Oxford tackled this question by analyzing market building in rural Bangladesh. Their findings challenge the accepted idea that filling certain institutional voids, such as granting people autonomy and property rights, will lead to the establishment of inclusive markets.

In Bangladesh, these institutional voids are actually “full of institutions,” Mair says. The institutions are not ones established by the government but are “locally emerging norms and rules of the game that come from the community sphere, from religion, and from political spheres,” she explains.

For example, the Bangladeshi constitution grants all citizens ownership rights and protection of property. But in reality, the patriarchal culture confers the control and ownership of women’s property to men. The Muslim practice of purdah obligates women to stay close to home, limit contact with unrelated men, and avoid visibility in public. Such restrictions make it difficult, even impossible, for women to go to a village market.

In their study, the researchers also looked at how BRAC, an NGO, has worked to build inclusive markets by addressing these voids. BRAC works in several countries to combat poverty and promote economic development.

In Bangladesh, BRAC reduces inequality in two ways: by creating structures that redefine the market, and by educating people on their rights. For example, BRAC creates meeting spaces where people of unequal status can interact. It also has produced dramatic plays that serve as a medium for the community to discuss controversial issues. Fostering conditions to build inclusive markets is “a process that not only takes time but also takes engagement with the local realities, which are constantly evolving,” Mair says.

The lesson from Bangladesh is that understanding local traditions and cultural norms is crucial to establishing markets that include all citizens. What works in Eastern Europe probably won’t work in Southeast Asia. “Markets might be the solution for social and economic development,” Mair says, “but we need to really take a look and try to think about markets in an inclusive way and not think that one model fits all.”

Johanna Mair, Ignasi Martí, & Marc J. Ventresca, “Building Inclusive Markets in Rural Bangladesh: How Intermediaries Work Institutional Voids,” The Academy of Management Journal 55(4), August 2012.

Tracker Pixel for Entry