50 Things That Made The Modern Economy With Tim Harford

In 2009, a group of policemen in Afghanistan checked their phones for an important text message.

But when it came through, they felt sure there had been some mistake.

They knew they were part of a pilot project to see if their salaries could be paid via a new,

mobile money service, M-Pacer. But had they somehow overlooked the happy detail that their

participation brought a pay rise, or had someone mistyped the amount of money to send them?

The message said that their salary was significantly larger than usual.

In fact, the amount was what they should have been getting all along. But previously they received

their salaries in cash, passed down from the Ministry via their superior officers,

and somewhere along the line, some of that cash had been getting skimmed off, about 30%.

Indeed, the Ministry soon realised that one in 10 policemen, whose salaries they'd been

beautifully handing over cash for, did not, in fact, exist. The policemen were delighted to

suddenly be getting their full salary. Their commanders were less delighted at losing their cut.

One was reportedly so irate that he optimistically offered to save his officers that

trouble of visiting the M-Pacer agent, just hand over your phones and pins, he said,

and I'll collect your salaries myself.

Afghanistan is among the developing country economies currently being reshaped by mobile money,

the ability to send payments by text message or SMS. The ubiquitous kiosks that

sell prepaid mobile airtime effectively function like bank branches, you deposit cash,

and the agent sends you an SMS adding that amount to your balance, or you send the agent an SMS

and she gives you cash. And you can text some of your balance to anyone else.

It's an invention with roots in many places, but it first took off in Kenya. And that story starts

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