M-Pesa is a money transfer system that relies on cellphones, not banks or the government. Airtime provides an alternative currency to government-backed paper. Since a banking sector that gets some regulatory oversight is missing, people have taken to using their phones to collect and transfer value. In the first half of 2012, M-Pesa moved some $8.6 billion, so this isn't chump change.
Moreover, people make personal sacrifices to be able to have the technology to participate in this new institutional arrangement. iHUB research found that people would forgo meat at mealtime if it would save enough funds to allow them to make a call or send a text message that might eventually result in some economic return. A typical day laborer in Kenya might earn a dollar a day, but the value of personal sacrifices for cellphone access amounts to 84 cents a week. Two-thirds of Kenyans now send money over the phone. The service is popular precisely because financial institutions are too corrupt or not interested in serving the poor.
An important part of any government has always been infrastructural control, and maps have historically been the index to how infrastructure is organized and therefore a key artifact of political power. Civic leaders in one of Nairobi's uncharted slums decided to make their own digital map specifically for the purpose of identifying public infrastructure needs and raising their own taxes to help pay for the most urgently needed repairs. Ushahidi, the online mapping platform, has claimed many important victories in the battle to provide open records about the demand and supply of social services. In doing so, they've taught the United Nations a few things about managing disaster relief, and they've schooled the Russians about coordinating municipalities to deal with forest fires and lost children.
FrontlineSMS, another cellphone enabled governance mechanism, helps improve dental health in The Gambia, organize community cleanups in Indonesia, and disseminate recommendations about reproductive health in Nicaragua.
Of course, this type of tech-based governance isn't always a positive thing, and it can sometimes result in vigilantism. In many parts of the Philippines, the government is unable to dispense justice in a consistent way, and can't always follow through in punishing those convicted of serious crimes. So vigilante groups equipped with cellphones and social networking applications have organized themselves with their own internal governance structure to dispense justice. Over SMS they deliberate about targets, negotiate over punishments, and delegate tasks. Such groups are responsible for upwards of 10,000 murders in Manila, and they are blamed for killing both drug lords and journalists on Mindanao.
Plus, plenty of these technology-enabled governance systems are stillborn without some kind of state backing. Most of the Congo is un-policed, and the government cannot track the movement of local militias. In the absence of the institutions, the Voix de Kivus network documents sexual assaults, reports on the kidnapping of child soldiers, and monitors local conflicts. UNOCHA, local NGOs, philanthropists, and USAID study the reports. In this case, the organizers admit that there is little evidence of a governance system taking root. Reports of conflict are now credibly sourced and appear in real-time, but nobody acts on the knowledge. In order to have serious impact, most social media projects need to work in concert with government.
Most examples of technology-enabled governance systems come from the parts of the world where the state really has failed to govern. But even in the U.S., digital media provides the work-around to weak government performance. Average Americans who felt the U.S. was not doing enough to support the Green Movement in Iran in 2009 could dedicate their own computational resources to democracy activists by hosting a TOR server. Citizens unhappy with government efforts at overseas development assistance turn to Kickstarter.com to advance their own aid priorities. The next cyber-battle might be started by Bulgarian hackers or Iranian Basijis, but it might also be started by Westerners using basic online tools to launch their own Twitter bots.
These may seem like isolated examples, but the reason such initiatives are important is that they are contagious. In the last 10 years, we've gone from imagining that the Internet might one day change the nature of governance to finding a plethora of examples of how this is really done. Cellphone companies across Africa, Latin America and Asia now offer asset transfer systems, many of which are structured like M-Pesa. There are some 35,000 Ushahidi maps in 30 languages. In complex humanitarian disasters, most governments and United Nations agencies now know they need to take public crisis mapping seriously.
International aid can help prop up a failing state and can help fund rebuilding operations in a state that has failed. However, the citizens themselves have to do the hard work of the actual rebuilding. These days, as people see their state falling apart, they pull out their cellphones and make their own arrangements.