Living and Trusting in the Economy of Debt: The Distribution of Newspapers and Magazines in Ibadan (2002).

This chapter examines the creation and maintenance of regularity in commercial relations in the context of economic volatility. Contrary to a general tendency toward “cash and carry” and decreasing trust in persons and institutions, most daily transactions in newspaper and magazine distribution in Ibadan were conducted on a credit basis. I found that these credit contracts were enforced neither through state regulation nor through social embeddedness but rather through repeated interaction, creative intitutionalization, and the accumulation of skills at certain nodes in the commodity chain. My in-depth interviews with 15 formal sector newspaper and magazine firms’ representatives and 10 informal sector distributors suggest that re-payment problems in the form of compete default and perpetual debt were extremely common. I show that while due to its monopolistic position as the sole source of its product, the formal sector had fewer problems with contract enforcement, it suffered more from problems with asymmetric information. I found that formal sector relied heavily on formal screening and sanctions, it also frequently outsourced risk to more capable informal sector distributors. In contrast, informal sector distributors tended to “excuse” larger portion of defaults – distributors were less likely see default as a result of a debtor’s malfeasance and more willing to accept a payment at a later date. Thus, my research highlightes the important position that large informal sector distributors with expertise in business and people played in regularizing credit transactions in both formal and informal sectors.

Obukhova, Elena (2002). Living and Trusting in the Economy of Debt: The Distribution of Newspapers and Magazines in Ibadan . In Money Struggles and City Life: Devaluation In Ibadan and Other Urban Centers in Southern Nigeria, 1986-96, J. Guyer, L. Denzer, and A. Agbaje, eds. p. 147-172. Heinemann: Portsmouth , NH .