BOOK REVIEW: FROM NONCONSUMERS TO NATION BUILDERS: HOW MARKETS, NOT AID, SPARK PROSPERITY

BOOK REVIEW: THE PROSPERITY PARADOX

AUTHORS: Clayton Christensen, Efosa Ojom and Karen Dillon

 

I have long thought that for development to happen, governments must first invest in people—improving the human resource through education and health, then provide infrastructure, both hard like roads, power and ports, and soft like laws, governance and institutions, to create an enabling environment for private sector growth. Do those two things well, I believed, and voila! development would follow.

The Prosperity Paradox by Clayton Christensen, with Efosa Ojomo and Karen Dillon, doesn’t completely tear down that logic, but it does shift the order of operations in a way that is hard to ignore. The book argues that market-creating innovations are often the spark that triggers everything else, not the prize waiting at the end.

Christensen introduces the idea of nonconsumption

—people who would benefit from a product or service but can’t access it because it’s too expensive, too complicated, or simply unavailable. Nonconsumers, he says, are not just a business opportunity; they are the largest pool of latent economic growth. The most transformative entrepreneurs don’t fight over the existing, saturated market—they figure out how to serve the nonconsumer...

Celtel – the current day Airtel in Uganda, is a perfect example. In the late 1990s, mobile phones in Africa were toys for the elite—expensive, difficult to obtain, and often unreliable. Mo Ibrahim saw the real market in the millions who had never made a phone call. Instead of chasing high-end postpaid customers, Celtel introduced prepaid models that worked with the irregular incomes of cash-based economies, expanded coverage to rural and peri-urban areas, and offered pricing that put mobile communication within reach for the first time.

The results were transformative. Farmers could check market prices before setting out, cutting days of unnecessary travel. Families scattered across countries could reconnect without costly journeys. Traders could coordinate supply chains across regions. And perhaps most importantly, the physical infrastructure followed the market, not the other way around—cell towers rose in previously ignored areas, roads were built to access them, and power lines extended to keep them running. Celtel didn’t wait for the perfect environment; it created one by making the market too valuable to ignore.

The book’s most provocative take is on corruption.

We tend to treat it as the main obstacle to growth, but Christensen calls it a symptom of poverty. In environments with few legitimate opportunities, bending the rules can feel like the only viable path to advancement. Market-creating innovations change that calculation. When profitable, legitimate opportunities expand, the rewards for honest participation start to outweigh the spoils of graft. In Celtel’s case, its economic importance meant policymakers were pressured—both by public demand and by the potential tax revenues—to keep the sector healthy. In other words, the market itself created a constituency for better governance.

At the heart of this process are entrepreneurs—local problem-solvers who live the realities they’re trying to change. They understand the constraints their customers face, from cultural habits to unreliable infrastructure, and they design around them. They don’t wait for governments to roll out every piece of infrastructure; they build markets that make governments and investors step in to support them. Mo Ibrahim’s success didn’t come from lobbying for a better investment climate—it came from embedding himself in a market so valuable that the investment climate had to adapt to keep it alive.

Christensen’s point is not to dismiss the role of government in education, health, or infrastructure. These remain essential to long-term development. But the book flips the script, showing how market creation can provide the resources, incentives, and political will to expand these public goods. In the authors’ telling, markets generate the tax base that funds public investment and the demand that compels infrastructure rollout. It’s a feedback loop—strong markets create stronger states, which in turn can nurture more market creation.

For policymakers, the lesson is to stop waiting for perfect conditions before encouraging entrepreneurship. Instead, find and back the innovators tackling nonconsumption head-on.

For investors, it’s a reminder that the highest returns, both financial and social, often come from markets others can’t see yet, the ones dismissed as too poor or too risky. And for those of us used to the old sequence of development, it’s a challenge to think differently. Sometimes the road to prosperity doesn’t start with a school or a power line, but with a phone in the hands of someone who never thought they’d own one—and from that single connection, an economy begins to bloom.