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Digital platforms and institutional voids in developing countries: The case of ride-hailing markets

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  • Heeks, Richard
  • Gomez-Morantes, Juan Erasmo
  • Graham, Mark
  • Howson, Kelle
  • Mungai, Paul
  • Nicholson, Brian
  • Van Belle, Jean-Paul

Abstract

Institutional voids – shortcomings in the institutional functions required by markets – have particularly hampered developing countries. Filling those voids has been widely identified as a strategy for businesses and in this paper we analyse the institutional actions of digital platform companies. Specifically and through primary research, we analyse the impact of e-hailing platforms (Uber, Bolt and EasyTaxi) in Colombia and South Africa on ride-hailing markets characterised by institutional voids. Alongside the void-filling discussed in the literature, we identify three other institutional strategies of these businesses: they also maintain and expand and create institutional voids. The platform companies’ institutional work has formed a market that is more efficient, effective, complete and formalised. At the same time, though, they have institutionalised problematic behaviours and significant inequalities. They have done this by internally institutionalising – within the digital platform and in their broader business model – previously-distributed market functions and power. We suggest some practical actions to address the downsides of platformisation through the filling of ongoing voids, and we identify some research priorities for future studies of institutional voids and platforms in developing countries.

Suggested Citation

  • Heeks, Richard & Gomez-Morantes, Juan Erasmo & Graham, Mark & Howson, Kelle & Mungai, Paul & Nicholson, Brian & Van Belle, Jean-Paul, 2021. "Digital platforms and institutional voids in developing countries: The case of ride-hailing markets," World Development, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:wdevel:v:145:y:2021:i:c:s0305750x21001406
    DOI: 10.1016/j.worlddev.2021.105528
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    2. Díaz de Astarloa, Bernardo & Lotitto, Estefanía, 2023. "The landscape of B2C e-commerce marketplaces in Latin America and the Caribbean," Desarrollo Productivo 48583, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Otioma, Chuks & Nsanzumuhire, Silas U. & Grillitsch, Markus & Jirström, Magnus, 2023. "Seeking for the shift towards challenge-oriented innovation policies: Tracing digitalization policies over two decades in Africa," Papers in Innovation Studies 2023/9, Lund University, CIRCLE - Centre for Innovation Research.
    4. Francis Lwesya, 2022. "Integration into regional or global value chains and economic upgrading prospects: an analysis of the East African Community (EAC) bloc," Future Business Journal, Springer, vol. 8(1), pages 1-14, December.
    5. Plantinga, Paul & Shilongo, Kristophina & Mudongo, Oarabile & Umubyeyi, Angelique & Gastrow, Michael & Razzano, Gabriella, 2023. "Responsible artificial intelligence in Africa: Towards policy learning," SocArXiv jyhae, Center for Open Science.
    6. Makoza, Frank, 2023. "Analyzing policy change of Malawi ICT and Digitalization policy: Policy Assemblage Perspective," EconStor Preprints 273309, ZBW - Leibniz Information Centre for Economics.
    7. Plantinga, Paul, 2022. "Digital discretion and public administration in Africa: Implications for the use of artificial intelligence," SocArXiv 2r98w, Center for Open Science.
    8. Katarzyna Cieslik & Roland Banya & Bhaskar Vira, 2022. "Offline contexts of online jobs: Platform drivers, decent work, and informality in Lagos, Nigeria," Development Policy Review, Overseas Development Institute, vol. 40(4), July.

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