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West-African car dealers bet on a business jackpot

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12.05.2006

Dutch researcher Joost Beuving concludes that the gambling behaviour of car traders has played an important role in the rapid growth of the West African second-hand car trade. This uneconomic behaviour emerges from the belief that they will one day make a fortune.

European second-hand cars flooded onto the West African car market in the 1990s. The port-town of Cotonou in Benin became an important operating base for this Euro-African car trade. At its peak in about 2000, several hundreds of thousands of cars per year were traded. During this period, most West African countries followed a neoliberal economic policy.

Yet according to Beuving the entrepreneurship of the car dealers was more important than free trade for the rapid growth of the West African second-hand car market. The car traders invested in the trade, even though they were making less profit, the prices were falling and there were increasingly more bankruptcies.

Beuving discusses this in his Ph.D. thesis, using four anthropological case studies situated in Cotonou. These reveal that the business world of the second-hand car trade was characterised by a strong and widely held belief in an unexpected business jackpot.

In addition to this the social relationships in this world were found to be brief and unharmonious. As a result of this it was difficult for the dealers to obtain reliable market information. Therefore the business decisions made resembled a gamble in which capital was frequently invested in an ’all or nothing’ attempt. This regularly led to large losses.

The conclusion from this thesis, which compared the gambling behaviour with that of the gold diggers in Klondike, forms a new perspective for the existing academic debates on entrepreneurship. These usually emphasise the capacity of entrepreneurs to earn money.

Joost Beuving | Source: alphagalileo
Further information: www.nwo.nl/nwohome.nsf/pages/NWOA_6PEFMB_Eng

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