economic action and social structure: 'cambisme' in kinshasa

Economic Action and Social Structure:

‘Cambisme’ in Kinshasa

Tom De Herdt

ABSTRACT

In the recent literature on institutions and social capital, there has been a

renewed emphasis on the importance of social structure in explaining the

performance of economic markets. Approaches to how this ‘social structure’

is conceived differ widely, however. This article examines the social structure

and partitioning of the market in foreign currency in Kinshasa, based on

fieldwork in the mid-1990s, and finds remarkable similarities with Geertz’s

seminal paper on the functioning of peasant markets and his description of

the bazaar economy in Sefrou. The case study is also instructive as it high-

lights the day-to-day reality of hyperinflation and monetary chaos.

INTRODUCTION

Although exchanging one thing for another (or for money) seems a verysimple operation, even the simplest transaction creates a margin for oppor-tunism, if only because of the time-lag between the moment of ‘closing thedeal’ and the fulfilment of each party’s commitments. This observation hasgiven rise to an interdisciplinary debate on the social embeddedness of themarket economy (Arrow, 1976; Basu, 1995; Dasgupta, 1988; Granovetter,1985, 1993; Kreps, 1996; MacPherson, 1984; North, 1990; Platteau, 1994).Recently, the debate has acquired a political level as it has been taken up bythe World-Bank, where it was connected to the literature on good governanceand social capital (see, for example, Dasgupta, 2000). While an active andpublic-spirited citizenry and egalitarian political relations constitute the ultimateguarantee of a well-functioning political system, the social fabric of trustand co-operation is a fertile ground for the emergence of a well-functioning

I would like to thank Stefaan Marysse, Toon Vandevelde, Johan Bastiaensen, Laurent Luzolele,

Robert Renard, Jean-Philippe Platteau and two anonymous referees for having provided very

valuable comments and critiques. The fieldwork reported in this article was carried out with

institutional support from the Universitary Foundation of Development Cooperation, the

Centre d’Etudes pour l’Action Sociale (Kinshasa) and the Facultes Catholiques de Kinshasa.

I have also benefited greatly from the collaboration of Mungandji Iyenda, Nana Ndana and

Ndongala Tadi Lewa during this phase. Remaining errors are mine.

Development and Change 33(4): 683–708 (2002). # Institute of Social Studies 2002. Publishedby Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main St., Malden,MA 02148. USA

market (Narayan and Pritchett, 1999). Consequently, the civic communityfacilitates a well-functioning state as well as a well-functioning market, sothe new credo goes.

The institutional setting of third world countries is diagnosed as a mirrorimage of this ideal situation. In the words of the late Gunnar Myrdal, indeveloping countries limited group loyalty co-exists with ‘little loyalty tothe community as a whole’ (Myrdal, 1970: 235). In Myrdal’s view, society ismade up of fragmented loyalties and this causes ‘state failure’, or at leaststate bureaucracies to perform badly. In more contemporary writings, it isargued that market development is incompatible with such a fragmentedsociety. Platteau recently restated the problem of the market society in termsof an ‘impossibility theorem’: as long as morality does not exceed the bound-aries of the group of (in-)direct acquaintances, this entails ‘a contradictionbetween two conditions of a market order: that required for mitigating op-portunism and that of independence (or atomization) of the agents’ (Platteau,1994: 553). In the absence of a generalized morality, norms of limited groupmorality can mitigate opportunism, but at the cost of decreasing atomization:transactions are realized within small groups or clusters so as to enable theflow of information necessary to neutralize opportunistic behaviour. As aresult, potentially more efficient competitors outside the group of trustedacquaintances are excluded, leading to efficiency losses.

Valid as the general description might be, it is not very informative abouthow to move from the mirror image to the supposed ideal. Moreover, evenif generally valid, particular situations can still vary considerably in termsof details. Such issues can only be addressed by looking at ‘markets’ and‘states’ as social constructions, the aggregate outcome of particular socialplayers’ strategies at some particular time and in some particular place(Granovetter, 1993). An interesting point of departure for such an exercisefor third world markets is Clifford Geertz’s analysis of ‘limited grouployalty’ as one of the possible stratagems used by people in contexts where‘the search for information one lacks and the protection of information onehas is the name of the game’ (Geertz, 1978: 29). In the bazaar which hestudied in Sefrou, he observed that phenomena such as clientelization,spatial localization and specialization of trade along ethnic lines are theoutcome of:

an actor-level attempt to counteract, and profit from, the system-level deficiencies of the

bazaar as a communication network — its structural intricacy and irregularity, the absence

of certain sorts of signalling systems and the undeveloped state of others, and the im-

precision, scattering and uneven distribution of knowledge concerning economic matters of

fact — by improving the richness and reliability of information carried over elementary links

within it. (Granovetter, 1978: 31)

Taking this constructivist view of the institutional structure of markets asa starting point, we might suppose that the resulting partitioning of themarket is in itself relatively dynamic. More particularly, it would be logicalto hypothesize that this partitioning would evolve in response to (i) changing

684 Tom De Herdt

power positions of key actors or changes in the economic, political andsymbolic resources they can engage in the information-game; and (ii) changesin the system-level informational deficiencies in the market.

In this article, we will explore these hypotheses in empirical detail bystudying the foreign currency market in Kinshasa (Democratic Republic ofthe Congo, former Zaire) or, as Zairians know it, the sector of cambisme,using empirical material collected in 1994–96. This market is peculiar inseveral respects. To begin with, it ought not to exist in a well-performingeconomy, backed up by a state whose ‘good governance’ is guaranteed by awell-functioning civil society. Further, the market in foreign currency isa market in which two very standardized products are exchanged. In thisrespect, there is not much information either to hide or to share. However,the primary determinant of ‘system-level information deficiencies’ in thiscase is the behaviour of the state and its representatives. The state directlyinfluences the market structure through those representatives who claim toguarantee law and order and enforce the state laws. Whether or not theexchange is profitable, the realized profits will depend on the probability ofnot being detected — and this probability can of course be manipulated tosome extent. Moreover, over the period considered, this ‘probability’ haschanged considerably, reflecting both changes in the legal status ofcambistes and changes in the respective socio-economic positions of thecambistes and the concerned state representatives. Further, over the periodstudied, the state had considerable influence over the market in severalindirect ways. In principle, the state is the most important player in themarket since the monetary authorities determine the national currency’sstability — and instability — and its relative value vis-a-vis foreigncurrencies. Thus, changes in the state’s direct and indirect involvementcan be considered as one of the main determinants of the informationproblems present in this market. In fact, the state’s monopoly in issuingmoney has increasingly been challenged by the appearance of various typesof counterfeit currencies, including counterfeit dollars (see below, andUnited Nations, 2001), thereby increasing the degree of ‘system-level infor-mation deficiencies’ still further.

The following section gives a brief background to the general economicand political context in which the cambistes were operating. In the subse-quent sections, more specific contextual details for several time periods arethen connected more directly to the evolving institutional structure of themarket. Some conclusions and suggestions for possible generalizations toother markets are offered in the final section.

THE BACKGROUND

Economics textbooks describe money mainly in functional terms. In themarket economy, money facilitates exchange, it is used as a unit of account

Economic Action and Social Structure: ‘Cambisme’ in Kinshasa 685

and as a means to store value. For these three functions, monetary stabilityis a necessary prerequisite. This stability implies that the production of moneyshould be a state monopoly. However, the state itself is not necessarily aneutral administration; it has its own needs. Having a monopoly on issuingmoney, it can also obtain money at mere printing cost. This ‘seignoragerevenue’ may be used as a substitute to ordinary instruments of incomegeneration, but almost inevitably results in inflationary tendencies (De Herdt,forthcoming).

The post-independence Congolese-Zairians have always had to put upwith an unstable currency. In the two decades between 1975 and 1995,annual inflation never fell below 27 per cent. The bottom line of 27 per centwas reached in 1985, the year in which the IMF called Zaire ‘a good pupil’.During 1975–89, average annual inflation was 64 per cent, but for the period1990–95 it averaged 3,616 per cent annually. The revenue generated by this‘inflation tax’ averaged US$ 200 million per year between 1970 and 1990,and peaked at almost US$ 1 billion in the early 1990s (1991). From 1991 to1994, seignorage revenue even exceeded ordinary tax revenue (De Herdt andMarysse, 1996: 212). During the early 1990s, the evident long-run benefits ofadministering a stable economy were apparently overtaken by the short-runadvantage of obtaining money at its printing cost. According to Capie (1991)this situation is usually characteristic of serious civil unrest or war: in thecase of Zaire, the overthrow of the Mobutu regime (1996–7) and the actualperiod of war (August 1998 to the present) did indeed activate the money

Figure 1. Evolution of Quarterly Inflation in Zaire (1985–98)

Source: own calculations, based on Index Consumer Prices on the Markets in Kinshasa,published by Banque Nationale du Zaıre (various issues).

686 Tom De Herdt

machine, resulting in high inflation. However, the period of ‘real’ hyper-inflation should be situated much earlier, between the final trimester of 1990and the final trimester of 19961 (see Figure 1). The beginning of hyper-inflation coincided with a number of other political and economic changesand decisions, among them Mobutu’s announcement of the end of the one-party state, the Bindomania and subsequent virtual bankruptcy of thebanking sector, the almost complete withdrawal of foreign direct aid flowsand the implosion of the copper sector, the crucial backbone of the Zairianeconomy (De Herdt and Marysse, 1996; Mutamba Lukusa, 1999; KabuyaKalala and Matata Ponyo, 1999; de Villers, 1997).

More important for our discussion, however, is that, like all taxes, theinflation tax can under certain conditions be evaded. More specifically, theamount of tax to be paid can be minimized by minimizing the amount ofnational currency. One of the ways of doing this is to make use of foreigncurrency as much as possible. Elsewhere, I have estimated that, in the early1980s, around US$ 350 million (or about two thirds of the monetary masscirculating on Zairian territory) was foreign money, mainly American dollars(De Herdt, 2000: 206). The market of foreign currency in Kinshasa played amajor role in people’s strategies to convert national currency (still the mostimportant means of exchange on the markets of Kinshasa) into stable valuedollars.

Another, less well-known characteristic of periods of hyperinflation isthat prices not only rise very quickly, they also rise very erratically. Figure 1demonstrates this phenomenon for Zaire-Congo. In fact, within these tri-monthly data lie many month-to-month, week-to-week, day-to-day andsometimes even hour-to-hour variations. In Kinshasa, for example, it wasunderstood that the prices would have to go up whenever newly-printedbank money arrived on the (street) market of foreign exchange: the so-called‘Corando-effect’, named after the jeeps which transported the new moneyfrom the National Bank to the cambistes (Beaugrand, 1997). Clearly, it isimportant for experienced cambistes to know about these phenomena, toanticipate them and to protect inside information from others.

Although we noted above that the products to be exchanged in foreigncurrency markets are by definition of a standardized type, some peculiarphenomena related to hyperinflation indicate that this was not the case forthe Kinshasa market during the 1990s. In the first place, there were frequentstories of counterfeit money, not only Zaires but also dollars (Misser andVallee, 1997). The confusion over false (New) Zaires was further increasedby the circulation of false money which was printed with the same printingpress as the legal money, an affair known as the ‘Affaire Khanafer’ (De Herdt

1. This period would correspond to a definition of hyperinflation as starting when the rise in

prices exceeds 80 per cent and ending when the monthly rise in prices drops below that

amount and stays below for at least a year.


and Marysse, 1996). Given the virtual bankruptcy of the ‘formal’ bankingsystem and the subsequent immobilization of current accounts, chequesbegan to circulate at a fraction of their face value (as little as one eightieth oftheir value); similarly, several newly issued banknotes were simply refused orwere exchanged at a fraction of their value. In an alleged attempt to endhyperinflation, the government launched the New Zaire in October 1993,but without taking sufficient care to print enough banknotes. The resultwas nothing less than monetary chaos, during which several fortunes werelost, but others were made (De Herdt, forthcoming). In a response to thechaos, the Kasaı provinces refused to accept the New Zaire, and continuedto work with the old ones up to 1998, when the Franc Congolais wasintroduced. Again, inter-regional trade networks and informal networksconnected to bank personnel probably made fortunes through the ‘de-monetized’ old Zaires in the Kasaı provinces. More generally, however, allthese phenomena suggest that protected access to trustworthy information isthe crucial key to enrichment even in the ‘standardized product market’ offoreign currency.

Given the importance of hyperinflation as a major source of all sorts ofinformation problems, this period is used here as the main reference point.The following sections will therefore examine the foreign exchange marketof Kinshasa before, during and after this period.

THE 1980s: FEMALE CAMBISTES

The Socio-Economic Context

The cambistes from Kinshasa who were interviewed in 1994–96 were mainlymale — young men and students (see also Tshimanga, 1995). However,cambisme existed well before 1990. The oldest cambistes interviewed hadstarted their activities in 1971–72. The main characteristics of the firstcambistes bore little resemblance to their counterparts in the mid-1990s: theywere almost exclusively women, directly linked to smuggling networks.

Until 1990, cambisme was strongly connected with commercial activitiesbetween Kinshasa and Brazzaville, on the other side of the Zaire River, or atleast with international and illicit trade networks. Foreign currencies wereused in Zaire almost exclusively to facilitate the international trade in thesecond economy. Smuggling was very lucrative, as is shown in Table 1.Between 1970 and 1975 the official rate of the Zaire currency did not change(fixed parity with the dollar), while the purchasing power of local moneyconstantly diminished. The policy of making up the budget deficit by print-ing money led to an over-valuation of the national currency, making con-sumption of imported goods cheaper, and exports of national (agricultural)production less profitable. The banking authorities rationed the demandfor foreign currency. As a result, it became worthwhile to collect foreign

688 Tom De Herdt

currencies to import manufactured goods from neighbouring countries in anillicit way.

Interviews reveal that the smuggling networks that emerged in this periodwere predominantly organized by women. They were usually single, widowedor divorced, and came from the inland riverine areas. At the time, the centreof cambisme was beach Ngobila, where the boats from the interior and fromBrazzaville moored. The jump from the interior channel to the Brazzachannel was not difficult in either geographical or social terms: beachNgobila was the meeting point for female merchants from both commercialchannels. The cross-river trade between Brazzaville and Kinshasa wasconsidered a superior alternative to the river-borne trade between Kinshasaand its hinterland, and offered the women a way out of the precarioussituation in their original villages. Take T.S. for example: after her divorceshe started to trade in smoked fish and plantain bananas between Kisanganiand Kinshasa. One year later, after a fight on the boat, she decided tobecome initiated into cambisme by her sister-in-law at beach Ngobila, inorder to ‘properly secure the education and the survival of the children’.Another woman, H.V., grew up with her paternal aunt in Mbandaka(Equateur province) and was initiated in the river trade by her aunt. On theboat, she started meeting ‘single women who get married on each trip, onthe way to and back’. Although she began to become accustomed to this life,she decided to look for some stability, got involved with a man and becamehis second wife. However, lacking resources to raise her first son, shedecided to take up the trade again. At beach Ngobila, she found many of herformer friends, and consequently entered the world of cambisme.

Unfortunately, the interviews with the cambistes are silent on the source ofsupply of foreign currency. From other information, however, we can deducethat most of the foreign currency came from fraudulent diamond exports toCongo-Brazzaville, and other countries. Before 1983, diamond mining by

Table 1. The Evolution of Rates of Depreciation and Inflation (1970–95)

(1) (2)

Official Rate of

depreciation of Z/NZ

vis-a-vis US$

(3)

Rate of depreciation of

domestic purchasing

power of Z/NZa

(4)

Rate of real

appreciation of Z/NZ

vis-a-vis US$b

1970–1975 0% 58% 58%1976–1982 75% 93% 18%1983–1989 93% 94% 1%1990–1995 100% 100% 0%

Notes:a prices in the markets of Kinshasa.b calculated by subtracting column (2) from column (3). This is a slight over-estimation; weignore the change in international purchasing power of the US$.Sources: Own calculations, based on IMF (1993), and Banque National du Zaıre (1/96).


private individuals was strictly forbidden in Zaire. Yet there have always beendiamond comptoirs in Brazzaville, although there are no diamond depositsin the country. In 1983, the first official diamond comptoirs were opened inZaire, the result of which was a sudden rise in exports of official diamonds,from a value of less than US$ 100 million in 1982 to US$ 201 million in 1985(CNE-data2 in Figure 2). The legalization of artisanal exploitation almostcertainly caused a shift in trade flows, from illicit exports to legal commerce,as is testified by a decrease in activity in the comptoirs of Brazzaville (seealso CNS, 1992). Figure 2 also shows that the post-1983 decline of diamondexports from Congo-Brazzaville was only temporary. By the end of the 1980s,Zaire’s neighbour was once again exporting more than US$ 100 million worthof diamonds a year. We will come back to this figure again later.

Another source of foreign currency for which we found information is the‘traffickers’ described by Makwala. People reportedly brought manu-factured goods into Congo-Brazzaville via Luozi (Bas-Zaire) and went backwith Congolese Francs which they could exchange in Kinshasa at a higher

Figure 2. Evolution of Diamond Exports: Comparison of Different Sources(1980–98)

Sources: Zairian data: MbomaMoyila (1992: 98) for 1980–90 data, BNZ/BNC Bulletin Mensuel(various issues) for later periods. Trading partners’ data: Statistics Canada (1998); for 1997–8,estimates based on Belgian imports (as given by NBB) and supposing a constant import sharefor Congo (ca. 95%) and declining import share for Zaire (resp. 73% and 71% for 1997–8).

2. CNE refers to ‘Centre National d’Expertise’.

690 Tom De Herdt

rate (Makwala, 1991). It is, however, difficult to estimate the importanceof this channel. Finally, there is a (minor) supply of foreign currency whoseexact origin cannot be traced: foreign currency holders in the capital, tourists,travellers, and so on. This is why the cambistes began to appear gradually inthe streets of Kinshasa. Schoepf and Walu Engundu describe this type ofcambisme in 1987 as follows: ‘Most of the cambistes working in the streetsare women. Renowned to be really good-looking (basi ya kilo),3 informersconfirm that they are protected by men from the political system’ (Schoepfand Walu Engundu, 1991: 131).

Immorality as a Signal

Four aspects of the cambistes of that period require attention. First, they are‘mainly women’, according to Schoepf and Walu Engundu. One of the oldercambistes confirms that it was only at the beginning of the 1980s that ‘somefew men entered into cambisme’. This is supported by our research, whichincluded interviews with three ‘old’ male cambistes. One started in 1982 inBrazzaville at the age of 18, another started in 1984 after the ‘rationaliza-tion’ of the Public Service (as part of the package of structural adjustmentrun by the first Kengo-government), and the third one was initiated in early1980.4 Far from being considered attractive, cambisme was looked down on:‘It was single or divorced women who were engaged in exchange activities,nobody was attracted by cambisme ’. The men only became interested inthese activities at the beginning of the crisis of the formal economy, whenthey were looking for an alternative way to generate an income outside theformal system. Economically speaking, the men entered cambisme too late:in 1983, the government changed its policy, devaluing the national currencyto eliminate the gap between the official and the parallel exchange rates(Table 1), so that the difference between official and parallel rates virtuallydisappeared. The first generation of cambistes grew very rich indeed: thewomen who started in 1971/72 are now among the most famous cambistes ofKinshasa. One could say they almost manage businesses even if they work inthe second economy. H.V., for example, does not work in the street anylonger — others do it for her. She is rather ‘a guarantee of trust’, ‘morallyresponsible’, ‘her seniority in this job made her have many relations withpeople in town, and she can always intercede when the interests of thecambistes are illegally held up to ridicule’. In this sense, cambisme made upfor a precarious social status.

3. ‘basi ya kilo’ literally means ‘women of weight’, better translated as ‘important women’

than as good-looking women, even though the distinction is not necessarily important in

practice.

4. Around the so-called operation alpha, during which the 10 Z-banknote was demonetized

(De Herdt, forthcoming).


Secondly, although they were women, they felt protected by men, accordingto Schoepf and Walu Engundu. H.V. says that most of the first cambisteswere the second, third or fourth wife, while also being head of the family.It is precisely these ties with powerful men (at least, men able to supportseveral wives), that provided some protection from the authorities whoformally forbade cambisme at that time.

Thirdly, the female cambistes were not only women; according to Schoepfand Walu Engundu they were also ‘renowned for being really good-looking’. This is why cambisme is considered the profession of young people.In the words of H.V., after the age of 50, ‘you become less and lessattractive . . . Moreover, you become the keeper of the traditions you have tocarry on and hand down’. Getting older, ‘the female cambiste does notinterest men nor attract anybody any longer, because, as a cambiste shemust be attractive’.

This way of speaking about beauty suggests that the physical appearanceis not only a direct means to attract the male clients. To begin with, beautycould be interpreted as a social interface to allow inter-sexual communica-tion between non-relatives. Only if women are ‘free of traditional stereo-types of feminine subordination to a man, husband or father, can theyparticipate in public life and communicate with men outside the privatefamily circle’ (La Fontaine, 1974: 96). By imitating western women as theyknow them from the mass media, they show their identity as femme libre.In this sense, the ‘immoral’ reputation of ‘free women’ seems to be anadvantage rather than a handicap. Further, the aura of sexual promiscuitymay also be interpreted as a signal that one is both ready to engage intransactions which were officially repudiated, and protected by powerful menagainst police interventions. Indeed, the ‘immoral’ reputation of cambistesmight be one of the most important factors obliging clients to choose aparticular cambiste and to stick with it. By feeding the perception that themoral value of one’s competitors is doubtful, the cambistes are able to bindthe clients they already have. If people are ‘less interested in generalreputations than in whether a particular other may be expected to dealhonestly with them’ (Granovetter, 1985: 491), one can assume that thegeneral image of immorality does not necessarily inhibit the emergence oftrust with specific cambistes. Moreover, the cambistes themselves can arguablydefend their own market share by actively reproducing the generally badreputation of their competitors.

Fourthly, having reached a certain age, the women could not lead such alife any longer — not only because the skin ages, but also because womenfind their role as ‘keeper of the traditions’ incompatible with their occu-pation as cambiste. Even if a cambiste is already considered much more thanan ordinary river merchant, the work remains incompatible with ‘tradition’,which expects respectable women to withdraw from public life (La Fontaine,1974: 95–6). Note the double morals surrounding cambisme: on the one hand,the cambistes are connected to ‘honourable men’, who protect them and

692 Tom De Herdt

undoubtedly furnish the contacts to supply them with foreign currency, buton the other hand, being cambistes they signal that they belong to a dissidentfringe of society. They hope to repair their respectability by opting out ofcambisme at some (indefinite) point in time.

To sum up, although cambisme may have been a very rewarding activity,at least initially, it lacked social respect. While men were not (publicly)interested in it, to women who were excluded from the ‘virtuous’ path ofmarriage, cambisme presented an attractive alternative. A ‘free woman’ wasan accepted ideal of feminine realization in Kinshasa, as long as cambismecould be considered a temporary activity which permitted monetary accumu-lation to be translated into social status at a later stage. But most importantly,a cambiste with the outer characteristics of a free woman signals protectionby someone in power. Given the illegality of the activity, an indication of thedegree of connectedness to some powerful men was probably one of themost important determinants of one’s position in this market.

THE EMERGENCE OF ‘WALL STREET’

Socio-Economic Context

The rising demand for dollars can be best interpreted as a decreasingdemand for national currency, given the huge tax on holding nationalcurrency. In addition, people were also forced to dollarize, namely after theperiod of ‘Bindomania’, when the formal financial system went into anunprecedented liquidity crisis.5 From then on, virtually all importers had toconsult cambistes — or, more directly, export companies — to obtainforeign currencies to finance imports. Sometimes the commercial banksthemselves played the role of cambistes, by ‘matching up’ importer andexporter clients, who would fix a rate of exchange between themselves, withthe bank receiving a commission as middleman.

On the basis of interviews conducted with some large (formal) enterprises, itcan be concluded that their accounting systems were completely in US dollars,and that they minimized the amount of cash Zairian currency as much aspossible. This meant that non-retail enterprises required payment in USdollars, and that retailers had to make use of the black market for foreigncurrency. In the latter case, the amount changed averaged US$ 120,000 to150,000 per day. Of course, the demand for foreign currency varies. Towardsthe end of the month, for instance, enterprises are probably less reluctant

5. ‘Bindomania’ was the period during which Kinshasa was invaded by so-called money-

pyramids of the kind which caused the political collapse of Albania in 1997. It was named

after the most important monetary game, Bindo-Promotion, allegedly organized by a close

ally of the Mobutu-regime (De Herdt, forthcoming; Jewsiewicki, 1992).


to keep national currency as they have to pay their personnel using localmoney.6 Nonetheless, the estimate of former Bank director Buhendwa that‘all cambistes taken together don’t change more than 150,000 to 200,000 USa day’ (1996: 135) seems improbable, even though we are not in a position tomake an accurate counter-estimate.

The Central Bank itself also became, at least after 1994, a major consumerof foreign currency, as it was to finance the imports of banknotes. Apartfrom the Central Bank, other public institutions — or rather, persons usingthe public funds circulating in such institutions — also made use of theforeign currency black market. We managed to interview a (male) cambistenamed H. who was working (amongst others) for the Direction Generale desContributions (administration of direct taxes), which handled approxi-mately US$ 15,000 per day, and the Office des Douanes et Accises (customsadministration), which accounted for some US$ 20,000 per day. Anothermale cambiste had nine contacts in the National Bank and three in theZairian Army (FAZ), who provided him with an average fund of US$60,000 per day.

Elsewhere, we found traces of another network, starting in the NationalBank and involving a group of cambistes officially working at theUniversitary Hospital (see Ndaywel, 1997: 22–3). These cambistes wereundoubtedly involved in an informal network neatly dissimulated in theseinstitutions’ accounts. Given the high level of inflation, it must indeed havebeen very attractive to report an amount of Zaires at the day of entry, toconvert it the same day into dollars, and to convert it again into Zaires withsome delay, keeping the difference between exchange rates for oneself. Somesources also suggest that this mechanism (partly) explains the well-knowndelays in payment in the public sector during the early 1990s. It is also quiteconceivable that the cambistes we interviewed were given the job in order totransform illegally levied taxes, bribes and the like into dollars, so that theofficial accounts posed no problem at all. Though it is difficult to know howthese parallel circuits of money in the official institutions were organized,who knew about them, who tolerated them, and who participated in them,there is no doubt about their existence, and the size of the amounts handledby our interviewees shows their significance.

On the supply side of the market, something strange is happening.Although the incentive to supply dollars in the black market diminishedafter the liberalization of the exchange rate, illegal exports (and,consequently, the supply of ‘black’ dollars) seem to have been exceptionallyhigh in the 1990s. Figure 2 testifies to the increased gap between officialexports and real exports of diamonds. From 1995 onwards, total diamondexports amount to more than US$ 1.2 billion. Note that the informally

6. For a detailed study of monthly and even weekly price variations on the parallel market of

foreign currency, see Tshimanga (1995)

694 Tom De Herdt

transacted amount of diamonds exceeds the amount of diamonds exportedby Congo-Brazzaville. From 1990 onwards there is also an increasing gapbetween ‘official exports’ (as reported by Zairian customs services) and‘official imports’ of diamonds by Zaire’s trading partners. By 1995, thisdifference amounts to more than US$ 600 million, or nearly as much asofficially registered exports.7

Similar observations can be made about coffee,8 gold (De Herdt, 2000:240), copper (Kisangani Emizet, 1998) and other products. Althoughsmuggling networks were already in existence long before the early 1990s(MacGaffey, 1987; MacGaffey and Bazenguissa, 1999; MacGaffey et al.,1991), these networks showed no signs of drying up after the liberalizationof the exchange rate — quite to the contrary. This unexpected situationtestifies to the state’s lack of power in steering the Zairian economy — andto the difficulty of interpreting trade liberalization as an unambiguousmeasure of ‘good governance’.

Cambistes and Preneurs

Several indications thus suggest both a growing demand for, and supply of,foreign currency. This general change in the monetary policy of formal andinformal, private and public economic actors undoubtedly boosted thepublic appearance of the cambistes. From 1991 onwards, more and morecambistes were to be found in the city, particularly in the Avenue desAviateurs, the commercial centre for the well-to-do of Kinshasa. From 1991on, the market (as well as the street) was renamed ‘Wall Street’.

However, the change in name did not change the generally (bad)reputation of cambisme. Until the end of 1991, at least, cambisme was stilldominated by the same female cambistes. When, at the beginning ofSeptember 1991, the government of Mulumba Lukoji wanted to ‘formalize’cambisme, the chairwoman of ‘all the (1350) cambistes’ who were membersof the association Moziki Sentiments Ngobila firmly expressed her dis-agreement (de Villers, 1992: 65). At this point, three factors are worthbearing in mind. First, even if the market was officially legalized, there werefrequent local and more general attempts either to ‘formalize’ or simply todo away with cambisme. Second, because the sector sometimes traded huge

7. At the moment of drawing the country’s trade balance, the National Bank takes this into

account by multiplying officially registered exports with a factor 1.9. Part of this value

almost certainly remains outside Zaire, since much of the diamond trade is in fact

managed by foreigners or nationals storing their wealth abroad, and since some of the

diamonds exported by Zaire and Congo-Brazzaville come originally from Angolan

(UNITA) diamond mines.

8. The National Bank itself estimates ‘real’ coffee exports at 220 per cent of official

exports.


amounts of value, it was a potentially attractive target for ordinary crooks.The cambistes and their clients thus needed protection not only by thepolice, but also by the armed forces. Third, we have already discussed theexistence of several informal connections between cambistes and statepersonnel, at the National Bank and elsewhere: it remained important tohave ‘contacts’ at the higher levels of society.

The geographical and nominal change of the centre of cambisme wasaccompanied by some specialization of the cambistes: The women no longerbelonged to smuggling networks, but concentrated on money-changing.They built up relationships with people known as preneurs. Normally, thepreneurs present themselves in the morning with national currency they wantto exchange. The exchange rate is fixed at that moment. In the evening, theycome back to collect the equivalent in foreign currency. It must be stressedthat this process relies on a relation of reciprocal trust between the preneurand the cambiste. As early as 1991, Zairian banknotes were no longercounted individually, but were collected into bundles (liasses) of twenty-fivebanknotes, which were packed again into briques of twenty bundles.9 Thepreneurs usually come with one or more bags full of briques. The cambistesgenerally do not count the notes — they do not have time — but take thepreneur’s word. On the other hand, the preneurs trust the cambistes not toflee with the funds entrusted to them.

The importance of this connection between cambistes and preneurssuggests that the market can be considered as a structure of clientelisticnetworks, created ‘on the spot’. This is a very particular kind of trust: eachdeal between preneur and cambiste ends by the end of the day, which allowsfor continuous adjustment of the clientelist network and renegotiation of theattributes of the deal as a function of newly-discovered opportunities andconstraints.

1992–95: DISPERSAL OF THE MARKET AND DIVISION OF LABOUR

Reasons for Dispersal

From 1992 onwards, it becomes gradually more difficult to speak about the‘centre’ of cambisme. As well as cambisme activities in the residential zone ofGombe, centres developed in other parts of the city. One of the ‘new’ centreswas Oshwe Street, in the Matonge-area. The choice of Matonge is explainedby the presence of many West Africans, active in the international diamondtrade for many years, and by the location there of many hotels preferred bythe diamond-merchants from the interior passing through Kinshasa (Nanaand Mungandji, 1995: 3). But this was only the first among new centres of

9. Literally ‘bricks’, probably because twenty bundles of money had the form of a brick.

696 Tom De Herdt

cambisme. Later, cambistes could be found in almost all parts of the city,mainly around the existing markets.

This dispersal of cambisme accompanied the further dollarization of theeconomy: more and more people changed their local currency into dollars toavoid a reduction of the value of the cash in their hands. The dollar becamethe store of value par excellence, to the detriment of the (New) Zaire. But thedispersal of cambisme was also linked to efforts by the state — or by armedmen in uniforms — to suppress cambisme or to plunder the cambistes. Thisis also why the centre of cambisme in Matonge moved from Oshwe Street to‘Kanda Kanda’, an unasphalted road and therefore more difficult to enterfor the military, be they genuine or fake.

The dispersal of the market and the tremendous growth in the volumeof transactions was of course not possible without new cambistes enteringthe scene. This had consequences for the way in which the activity wasorganized and embedded in social networks. The ‘informal’ market ofcambisme became dispersed over the entire capital, but at the same time,there was also some regrouping. Because of the growing risks from the‘guarantors’ of law and order, an increasing number of transactions werecarried out indoors, often in a hastily reorganized room behind a bar. Ingeneral, however, this risk seems to have been traded off against thepecuniary advantage to cambistes of being together. We discuss each ofthese points in more detail below.

The Career of a Cambiste

The majority of the new cambistes were students. This can be partly explainedby the Bindomania, referred to above. The monetary games, and especiallythe ‘Promotion Nguma’ (said to be connected with a relative of the President)used mainly students as its workforce, as a way of keeping them out of politics(Jewsiewicki, 1992). It was therefore a small step for the students to getinvolved with cambisme, which was after all just another speculative monetaryactivity. Moreover, after the closing of the schools and universities, manystudents discovered an interesting extra activity in cambisme.

The information we obtained on how more ordinary city dwellers becamecambistes suggests two distinct ways into the ‘career’. The first way was topresent oneself directly as a cambiste, alongside other cambistes. Mrs C. is atypical example:

After the plunderings in 1991, my husband lost his job and we had nothing to eat. I started

selling bags of ice cream, but a friend told me I was damned stupid not to work in cambisme.

One day, we went to Wall Street together. From then on, I was left to myself. My friend said

she had her own clients and so I became her competitor. So I decided to sit down under a

tree, at some distance from her. There, I waited for the first clients. Someone came and, as

I didn’t have my own funds yet, I went to change his dollars in some shops, mainly Lebanese

ones, which still abounded in town before the second wave of plunderings. Later on, some

Lebanese people entrusted money to me to exchange during the day . . .


Mrs C.’s personal history demonstrates how the trust relationship she buildson is created ‘on the spot’. Mrs C.’s preneurs were simply merchants, whoknew her only as a cambiste. Only her reputation, based on former trans-actions, made her a reliable agent.

The second ‘path’ to entering cambisme connects to the structure of themarket. The results of our research suggest that people working in themarket of foreign exchange should in fact be sub-divided into severalcategories. These include the choqueurs, who try to establish contactsbetween the general public and the cambistes. At times the choqueurs arealso called cambistes debout (standing cambistes) whereas the ‘real’ cambistesare cambistes assis (seated cambistes). Other groups are the roulage and theatalaku. A roulage is a traffic-policeman, who is known in Kinshasa forintercepting drivers. The analogy with the man who tries to stop cars anddirect them towards the cambiste he works for is not too far-fetched.Atalaku refers to the dancers in Zairian bands.10 In the world of cambisme,this term is used to identify the persons who try to attract clients by shoutingthe specific foreign currency they can sell or buy (Tshimanga, 1996: 16).

The second way into cambisme, therefore, may follow such a pattern:you start as a roulage, you grow into a choqueur and eventually you couldbecome an independent cambiste yourself. To become independent meansthat you built up your own reputation, which is essential to establishinga reliable relationship with some specific preneurs. One of the cambistesputs it as follows: ‘we depend on them. Cambistes live thanks to thepreneurs’.

The Business Unit of the Cambistes

The dispersal of the market and the corresponding ending of the femalemonopoly over the market was also accompanied by a change in thestructure of the business unit of a successful cambiste. If there was someintensive collaboration among the cambistes before, it was with members ofthe family. In the words of Mrs K., for example: ‘the group work is veryproblematic. It is really hard to trust someone you don’t know very well’;‘my children often help me find preneurs or offers of foreign currencies’.Now, however, it is friendship rather than blood relations that unites thecambistes. J.P. for example, collaborates with two other cambistes, one ofwhom does not even come from the same region. The three got together inwhat is called an ecurie (a stable) to achieve a higher volume of transactionsand a more stable clientele. Each night, they divide the profits realizedduring the day. This not only highlights the absence of a hierarchy within

10. Strictly speaking, an atalaku is a ‘shouting deejay’ who warms up the audience (White,

1999).

698 Tom De Herdt

the ecurie: by dividing profits each day the need to trust the ‘boss’ is elim-inated as well.

The ‘pre-established relationships’ which make up the web of commercialrelationships can be of a very diverse character. The network described byan interviewee of Ndaywel e Nziem is a good example, consisting of an ‘oldboys’ network’ (or rather, old girls’ network) of nurses who managed toestablish contacts in the bank. These contacts shift: ‘We even identifiedpartners in the Banque du Zaıre who would be more interesting and betterplaced than the actual partners who supplied us with prostates. But thisproject has ended with the Liberation’ (cited in Ndaywel, 1997: 23). Theprostates are banknotes of 100,000 (New) Zaires, issued at the end of 1996,allegedly to pay for the President’s hospital costs in Switzerland. They werenot accepted in Kinshasa11 — although many wages were paid using thenotes — with the result that they circulated at around half their face value.The group of nurses bought them with dollars at their market value to resellthem to their contacts in the bank, at face value.12 The important point hereis the network: the nurses’ common occupation provided them with thenecessary (albeit weak) tie to build up a business relationship. Note also thateven the tie with their contacts in the National Bank was not fixed: it couldpotentially be replaced by another tie with ‘better placed’ persons.

Cambiste H., who was mentioned above (the cambiste of the Tax andCustoms Administration), provides another example to study the way abusiness unit is socially embedded. The quasi-enterprise of H., a so-calledcambiste assis, comprises eighteen cambistes debout dispersed over differentcentres. This allows H. to play on the small differences in exchange ratesbetween different parts of the city. H.’s business unit has a daily turnoverof around US$ 40,000. H. himself concentrates on the ‘big’ clients, whoneed discretion, but each morning he also provides his cambistes debout withlocal money that they can use to chase dollars. The transport of the Zairebanknotes is secured by three vans. We also interviewed M., who is some-times engaged as a freelance collaborator of H. He describes H. as someonewho has really ‘made it’ in Kinshasa.13 M. is sometimes sent to wealthyclients, to get money (with one of the vans), but he also has his own networkof cambistes debout he can entrust with money. M. and H. are from the same

11. Given that the country was partially occupied at that time by the Kabila-led AFDL forces,

and that the Kasaı provinces systematically refused the NZ banknotes, in practice the

100,000 NZ note only circulated in Shaba.

12. This would of course be a most ordinary transaction, unless we bear in mind that officially

no dollars could be obtained at that time in the bank.

13. Apart from referring to his material wealth (which includes a Mercedes Benz type 300

nouveau modele) M. also mentioned that ‘he supports musicians . . . They chant about him’.

This refers to the soirees folkloriques where dancers seduce the wealthy in the public to

‘waste’ their money by giving it to them, in exchange for being publicly honoured. As the

Zairian banknotes are of low value, it is not too costly to be an impressive ‘waster’ at such

occasions.


neighbourhood, and so are H.’s other cambistes. H. was probably ableto enlist some youth of his neighbourhood since he combined materialsuccess and success as a football star.14 Indeed, football training and gamesprovided an opportunity both for the two men to get to know each otherbetter, and for H. to introduce M. into ‘higher circles’ as a trustworthycambiste.

The end of the female monopoly over cambisme thus also implied a differenttype of business unit. The change from a family-business type of structuretowards more loosely structured units is, in my view, a direct consequence ofthe end of the female monopoly on the trade.

Cambisme as a Profession

According to Berger and Luckmann (1967: 153), language ‘realizes’ theworld, in the double sense of ‘producing’ and ‘apprehending’ the world. Thewords ecurie, choqueur, roulage, atalaku are all borrowed from different worlds(those of horse-races, city-life, dance), the users apparently discovering ananalogy between those worlds and their own. Following this hypothesis,cambisme might be seen as a game rather than an economic market, a dancerather than an ordinary transaction. That the actors themselves give sense totheir profession in this way is confirmed by their view of the future: almostall of them say that cambisme is only a temporary job. As many cambistesare actually students, most want to study to have a ‘real’ job. Many work incambisme and study at the same time. The nurse/cambiste interviewed byNdaywel admitted that: ‘What doesn’t change, even up to now, is the shameto be there, to wait for clients like a prostitute. Whenever I saw someoneI knew . . . I pretended simply to pass by, so as not to be perceived as acambiste’ (cited by Ndaywel, 1997: 22).

Cambisme is no more than a temporary relief, a loophole justified by thebig profits tied to it, at least in the eyes of the cambistes. We noticed thesame perspective in other informal activities: many carpenters and tailors,for example, find no pride in their profession, but see it as a temporaryway out of misery. They do not want their children to do that work, even ifthose activities are actually a lot more rewarding than the so-called formalactivities everyone would wish to undertake.

This way of giving meaning to cambismemirrors not only the world of thecambistes, but also the way that other economic actors see cambisme andinclude it in their way of life without compromising their own morality.According to the morality of the general public, cambistes are always

14. Many of the cambistes working for H. grew rich themselves; ‘richness’ is of course

debatable, but in the informant’s words: ‘Actuellement, ce sont des cambistes d’envergure.

Meme apres deux ans ils pouvaient s’acheter deja des Mercedes, BMW ou Mazda’.

700 Tom De Herdt

‘speculators’, bradeurs and insincere people, ‘prostitutes’ in the general senseof ‘being prepared to do anything to earn some money’. This suspiciontowards the cambistes in general is seen as perfectly compatible with creatinga relation of trust with specific cambistes who are known, directly orindirectly. In the course of our research, the first people we interviewed wereknown by (acquaintances of ) our researchers because, according to one ofthe investigators, ‘it is too dangerous to interview someone you don’t know’.

If the words tell something about the identity of the cambistes in relationto the society of Kinshasa, the emergence of a vocabulary peculiar tocambisme shows that the cambistes themselves create their own social field.This is supported by the fact that they have also developed some workingrules which are specific to their profession.15 For example, it was agreedto freely communicate information about the exchange rates. Moreover,cambistes buying or selling forged notes (also called boeufs or photocopies,or bikoro in the case of false dollars) are expelled and even handed over tothe police. Of course, this does not stop them from fooling foreigners orrural merchants who do not know the latest exchange rate. Such practicesare seen as astute business rather than as dishonesty. However, a certainunderstanding, and a sense of fair behaviour among the cambistes them-selves surely resulted from the social realization of cambisme in the societyof Kinshasa.

The most spectacular expression of this sense of identity among equalswas published — with an undertone of repulsion — in one of the news-papers of the capital. A relatively important (male) cambiste had died, andsuch occasions demand that the other cambistes act as ordinary familymembers would do, by observing a day of inactivity and contributing to thefuneral costs. Apparently, these principles were not respected by cambistessomewhere else in the city, which caused the mourning cambistes to attackthem, and a journalist to reconfirm the bad reputation of cambistes in general(cited in Grootaers, 1998: 34–5). Words written by Adam Smith in 1790 seemappropriate for explaining what happened here:

In the race for wealth, and honours, and preferments, every man . . . may run as hard as he

can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if

he should justle, or throw down any of them, the indulgence of the spectators is entirely at an

end. It is a violation of fair play, which they cannot admit of . . . They readily, therefore,

sympathize with the natural resentment of the injured, and the offender becomes the object

of their hatred and indignation. (Smith, 1790/1976: 83)

The example clearly shows that ‘honest behaviour’ in the world of cambismeis not only a product of interpersonal relationships with protectors, preneurs,colleagues and clients: ‘appropriate behaviour’ is defined also by the cambistesas a socio-professional entity of equals. Recently, attempts have been madeto interpret the respect for and adherence to professional norms as motivated

15. On the importance of this concept, see Commons (1924/1974).


by ‘collective reputation’ or ‘corporate culture’ (Kreps, 1996; Tirole, 1996). If‘honesty’ is partly guaranteed by these professional standards, the cambistesdo indeed have a collective interest in maintaining them. However, given theimperfect means to enforce these standards, ‘collective reputation’ canhardly serve as an explanation; it is not difficult to hide in a five-million city.

According to Smith’s alternative interpretation, behavioural standardsare enforced rather as a by-product of ‘jealous’ competitors. Judging by theundertone of disgust in the above-mentioned newspaper article, the meansused by the cambistes to convince others to adhere to the rules could evenfurther stigmatize the cambistes as a whole as immoral and uncivilized.Although, as already argued, such a stigmatization can be considered anadvantage in the Zairian foreign exchange black market.

Cambisme as a Group Activity

As we saw above, the dispersal of the market is at least partly a consequenceof the irregular attempts of the state, the police and military to regulate themarket. In this climate, it has become dangerous for cambistes to be toovisible. In this context, concentrating in one place might seem a risky idea,and many cambistes have indeed chosen a more discreet and isolated locationin response. However, a significant proportion of the cambistes still operatein a ‘centre’.

This is probably because a geographical centre eases the co-ordinationproblem between demand and supply: for those wanting to exchange moneyof whatever type, they will immediately know where to go, and will beinformed about the most up-to-date exchange rates. This argument pre-supposes that the cambistes’ customers can be fairly anonymous. This isconsistent with the role of the atalakus: in many cases clients arrive toexchange simply because they are ‘attracted’. Another factor relates to theshift of cambisme from a female to a male activity: much emphasis wasformerly put on the image of the ‘free woman’, but this image is of coursedifficult for men to exploit. Geographical concentration in ‘reputed places’can help to overcome this problem.

Finally, the advantage of grouping together can be understood as anattempt to reap information economies. As the exchange rate can changewithin minutes, it is important to be among the first to know it. Addition-ally, information can be exchanged about clients, cambistes who have falleninto disrepute, and so on. Competitors may co-operate on some points asa result of the emergence of some ‘professional standards’ (as mentionedabove), or because of the difficulty of keeping something secret for long whenyour neighbours are active in the same trade. The literature on Marshallianindustrial districts shows that such a peculiar mix of co-operation and com-petition is certainly not an original phenomenon, either in time, in space, orin this sector (Bellandi, 1986).

702 Tom De Herdt

Cambisme and Violence

In modern societies, it is often believed that insecurity or the problem oftrust is no longer an issue: either a sense of generalized morality prevents it,or the rule of law takes care of it. In Kinshasa, the latter prevails for themarket of cambisme — although it has less and less to do with the rule oflaw, as increasing numbers of military groups, working on their own ac-count, impose themselves as guarantors of order and protectors of propertyrights.

A specific event in Wall Street can illustrate this: at the beginning of August1995, the Civil Guard killed a cambiste, apparently without reason. Some dayslater, the other cambistes got the protection of the same Civil Guard (Carron,1995). In other zones, the cambistes must pay a small tax in return for whichthey receive a badge. From then on, they will receive protection. Mrs. K.(working at Lemba Terminus) notices that ‘since they have badges, there hasbeen more and more order in their profession. The sharks run away, afraidof being arrested by the policemen looking after their security’. If we useGambetta’s interpretation of the Mafia as a ‘business’ specialized in pro-tection (Gambetta, 1993), we can suggest that the economic dynamics inZaire is increasingly influenced by Mafia-like phenomena. This interpreta-tion also connects well to Bayart’s discussion on the criminalization of thestate in Africa (Bayart, 1994, 1999). This understanding between cambistesand policemen is advantageous to both parties. The former feel more secure,the latter accumulate some income. Just as in Italy or Russia nowadays,Mafiosi are popular. Of course, this does not eliminate the violence, presentat least implicitly in the relationship between protector and protected.

According to Gambetta (1993), Mafia-like phenomena are likely to emergein situations where (1) (demand-side) new markets are created and hencenew property rights must be protected; and (2) (supply-side) there are peoplewho have been trained to use guns but who have become unemployed. Thiswas the case in Italy after the Second World War, in Russia after the fall ofthe Soviet Empire (Varese, 1994), and in Zaire mainly since the beginningof the period of transition. The black market for foreign currency is clearlya market where different kinds of property rights are (still) ambiguouslydefined. Similar phenomena are observed in illegal diamond extraction.

A final point: from the moment the problem of opportunism is ‘solved’ bycreating a market where protection can be bought and sold, the privateoperators in this market also have an incentive to inhibit alternative (lessviolent) solutions to the problem. They thrive in a climate of generalizeddistrust. For this reason, the difference between a situation where the use ofviolence is monopolized and a situation where it is not is vastly different. Inthe first case, the monopolist has every incentive to stimulate all sorts ofarrangements that make recourse to violence superfluous. In the secondcase, every contender in the market for private protection can increase hismarket share either by contesting another contender’s share or by increasing


the market itself, which implies the obstruction of every alternative source oftrust.

CONCLUDING COMMENTS

Like Geertz’s bazaar economy, the foreign currency market in Kinshasa wasfraught with several types of system-level information problems. To beginwith, up to 1990, it was an illegal market. Consequently, the tie between thecambistes and their powerful protectors was a crucial economic asset forthem as well as for their customers. We argued that this is one of theexplanations why the market was initially almost monopolized by theparticular social group of ‘free women’: by associating with a specific VIP,they were able to manipulate the ‘probability of being caught’. This problemof protection against the military or the police did not end with theliberalization of the exchange rate as, during the 1990s, wearing a uniformcame to be considered an opportunity for extortion. Eventually, a realmarket-like structure for private protection emerged.

Further, the liberalization of the exchange rate in 1990 was accompaniedby new sources of system-level information problems: monetary chaos setin, characterized by hyperinflation, erratic price-movements and increasingconfusion over the real value of some monetary instruments. In such acontext, a further partitioning of the market was logical. The cambistes beganto develop trust relationships with a limited number of preneurs (suppliers ofnational currency). Indeed, during the 1990s, a more professional cambisteseems to have emerged who builds credibility simply by proving it on thespot. Longer-term associations and quasi-enterprises are founded on oldboys’ networks, neighbourhoods, ethnic clubs, football teams, religiousorganizations and the like, although the glue that holds them together iseconomic performance rather than social ties. Eventually, this led to the endof the quasi-monopoly of free women over the market, although the tradecannot shake off its ‘immoral’ reputation. We argued that this is nocoincidence: the immoral reputation of cambisme is probably even activelyreproduced by the cambistes themselves, as they can bind their customersbetter by putting a slur on their competitors. Interestingly, since by themid-1990s the majority of cambistes were male, the aura of immorality wasno longer tied to the image of the cambistes as free women, but ratherassociated with the specific locality in which they were operating.

Notwithstanding the numerous information problems characterizing thismarket, as a whole it functions relatively well in the sense that even formaland large economic operators participate in it on a regular basis. The marketperforms better than the formal banking system in terms of access to foreigncurrency. Moreover, the way in which the social structure of trust relation-ships seems to vary and evolve as a function of changes in system-levelinformation deficiencies and changes in the actors’ relative power strongly

704 Tom De Herdt

suggests that the limited-group networks of loyalty which make up themarket are not really restraining it. As suggested by Granovetter, clientel-ization may both solve the information problem and create a problem ofmonopolization. Realizing this, the actors themselves have an interest inavoiding an overly-elaborate and suffocating loyalty system (Granovetter,1993).

The argument made here should not be taken as a functionalistic thesisabout the economic determinants of social structure. The importance ofindividual-level efforts to distort information has been stressed — slurringone’s competitors is part of the information game. Further, as argued byGranovetter (1993), the characteristics of the goods play a role, as do somesocial-structural characteristics of the economy. In this respect, the organ-ization of the foreign currency market has some peculiar characteristics.Following Fafchamps and Minten (1999), it might be termed a ‘financialflea market’. Fafchamps and Minten introduced this concept to show that,in the Malagasy grain trade, problems of opportunism were initiallyprevented by transacting only small quantities, with the goods visiblyexposed to check on quality, and with payment in cash. Besides eliminatingsome information problems, the flea market structure also enables thegradual emergence of limited-group loyalty: it becomes relatively easy tosubdivide different parties’ engagements and adapt one’s trust networksfrom day to day, in response to the daily performance of the other party(Granovetter, 1993: 26). In contrast, whenever a transaction involves sunkcosts and indivisibilities, the problem of trust becomes vastly more complex(Bates, 1996; Davis, 1973: 218–22).

Finally, economic actors willing to make investments involving sunk costsmust not only be able to trust their effective trading partners, but they mustalso be protected from potential intruders as well. With this general term, wemean ordinary crooks as well as those who present themselves as guarantorsof law and order. Sectors where capital can easily be reconstituted cancontinue to survive in such an environment, whereas sectors requiring largesunk investments cannot. Using a comparison from the recent industrialhistory of the country highlights the difference: a cambiste simply movesfrom one place to another, whereas a failed producer will close down. Thesame difference probably also explains the rather extraordinary replacementof (voluminous) copper by (miniscule) diamonds as Zaire’s main exportproduct (see De Herdt, 2000). Can you transport copper in your stomach?

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Tom De Herdt studied economics and sociology and is currently engagedas post-doctoral researcher at the Institute of Development Policy andManagement, University of Antwerp, Middelheimlaan 1, B-2020 Antwerp,Belgium (e-mail: [email protected]). His publications are mainly in thefields of poverty and informal economic activities, on the basis of hisfieldwork in Congo-Kinshasa.

708 Tom De Herdt

economic action and social structure: 'cambisme' in kinshasa

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