Doctoral Dissertation Research: Informality and Flexibility in Loan Networks and Debt Dispute Resolution

Stanford University, Stanford CA

Investigators

Abstract

It was once the widely held belief among practitioners of economic development that economic growth was frequently hindered by the existence of traditional cultural practices and attachments, which could prevent the emergence of more formal institutions. That position is no longer so widely held, as several decades of globalization have produced ample evidence of culturally blended patterns in instances of robust economic development, as informal economic structures have developed with local cultural notions of fairness, flexibility, risk and trust. As a result, informality is now celebrated as a model of flexible economic growth and practitioners are increasingly encouraged to adopt parameters reflecting the diversity of economic development strategies. Scientists remain challenged, however, as to how to identify and model the pathways through which informality and flexibility benefit economic growth. This project, which trains a graduate student in how to conduct rigorous, empirically-grounded scientific fieldwork, will explore the ways in which informality, as a fundamental cultural pattern of this new flexible economy, influences existing economic structures and the propensities for economic growth. Samil Can, under the supervision of Thomas Hansen of Stanford University, will explore debt relations and dispute resolutions by tracing loan networks and practices of resolving debt disputes. The research will be conducted in Delhi, India, a commercial center in one of the world's most important and largest emerging economies. Based on preliminary research, the researcher holds that India has diverse moral and religious notions of exchange, credit, obligation and authority working to maintain informal and flexible economic structures. Based on this claim, the project whether and how these moral and religious notions socio-culturally undertake and diversify the roles fulfilled by the state, the banking system, and the regulations in an idealized formal economic model. The project investigates how Muslim traders, shopkeepers, warehouse suppliers, and retailers establish social networks to find debts and resolve debt disputes using formal and informal authorities (e.g. religious leaders, elders, court system, and police). Preliminary data suggests Muslims of Old Delhi heavily rely on religious and moral notions in their transactions, but also maintain access to other local and transnational economic networks. Therefore, this project seeks to provide generalizable insights on how flexible economic growth relies on various and ever-changing cultural notions. The project will utilize ethnographic methods (participant observation of carefully selected informants, in-depth interviews, oral histories) and spatial research methodologies (social network analysis, socio-spatial mapping) in order to document how these cultural economic transaction patterns among Muslims in Delhi relate to the larger informal economy of Delhi. The findings will significantly inform academic and intellectual debates over "flexible economic growth" by outlining its everyday practical implications and exploring the ways in which debt obligation is culturally framed. It will contribute significantly to a pressing global debate on the concept of "debt" among anthropologists, economists, political scientists, and a wide range of non-academic policy-makers. Amidst recent debates on the authority and legitimacy of creditors and debt-giving agents, the study on cultural frames of new local and global economic patterns shall also provide vital intellectual and practical insights on how current initiatives to restructure debt in financial markets should be formulated in relation to informality.