Local economic development: Is purchasing street vendors’ candy the right strategy?

My curse as an academic is that I am always thinking about stuff that is outside of my research area. I’m a specialist in comparative public policy who uses water, wastewater and solid waste as case studies for the study of cooperative behavior. I do, however, have a minor in economic geography, and an MBA, so as a result, I often think about (and in the fall, will teach about) local economic development. In fact, my course is titled “Regional Development” but I’ll have to touch on local economic development anyways.

I know enough location theory and foot traffic analysis to understand the basis of local economic development when it comes to established enterprises. But I’m a lot less informed about informal trade. For example, the (often indigenous and impoverished) women who sell candy at busy intersections. Or simply on the streets. I’ll confess that I ALWAYS buy them candy. My thinking (however misguided) is that at least, these women (and a few men) are working and they’re doing their best to bring money to their household and put food on the table.

I’ve never studied the informal trading/selling sector. I study the informal waste recycling sector, but street vendors are not my speciality and therefore I’m pondering if buying marzipan and chocolates from these street vendors does actually help them in any way, shape or form. I wonder if it is actually a smart strategy to alleviate poverty. But given what Chris Blattman and Paul Niehaus recently published in Foreign Affairs, I’m tempted to say that buying candy from street vendors may also be a smart local economic development (and poverty alleviation) strategy.

Blattman and Niehaus write this powerful phrase that resonated with me:

It’s well past time, then, for donors to stop thinking of unconditional cash payments as an oddball policy and start seeing them for what they are: one of the most sensible tools of poverty alleviation.

I don’t know, and probably will not know until I do more in-depth research, whether supporting street vendors does any good as a poverty alleviation strategy, but if we consider it as a cash transfer (however individual the effect), perhaps it is. I’m open to hearing thoughts, though.

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