New Information and Communication Technologies and Poverty: Some evidence from developing Asia

M. G. Quibria, Ted Tschang, Mari-Len Reyes-Macasaquit
2002 Journal of the Asia Pacific Economy  
The emergence of Information and Communication Technologies (ICTs), in particular the Internet, has generated new enthusiasms about the development prospects for poor economies. Many now think that new technologies can provide a faster route to better livelihoods and improved quality of life than the one afforded by the standard process of industrialization. The opposing view holds that the focus on ICTs will detract attention from the more fundamental task of addressing the basic problems of
more » ... onomic development. This paper attempts an even-handed evaluation of issues relating to the direct and indirect, yet broader economic impacts of ICTs. This is done by evaluating a selection of "case stories" on the direct uses of ICTs to alleviate poverty, and an analysis of the broader issues of ICTs in relation to economic growth, and of the determinants of technology adoption. The paper shows that as far as direct impacts are concerned, the use of ICTs holds significant promise, but existing data do not afford a full-fledged cost-benefit assessment. Similarly, while ICTs can also positively contribute to the broader economy, the realization of such benefits requires a physical and social infrastructure well beyond that existing in many poor countries. PREFACE The ADB Institute aims to explore the most appropriate development paradigms for Asia composed of well-balanced combinations of the roles of markets, institutions, and governments in the post-crisis period. Under this broad research project on development paradigms, the ADB Institute Working Paper Series will contribute to disseminating works-in-progress as a building block of the project and will invite comments and questions. I trust that this series will provoke constructive discussions among policymakers as well as researchers about where Asian economies should go from the last crisis and current recovery. ABSTRACT Many commentators have extolled the virtues of new information and communication technologies (ICTs) in reducing poverty and improving the quality of life. While such arguments have been used before in relation to many predecessor technologies, including other earlier communications technologies, the promise has often floundered. This paper attempts to provide a more balanced analysis of the question, by exploring the linkages between the new ICTs and poverty reduction. It examines the linkages in two ways: the potential for direct impacts of ICTs on various areas of poverty and development, and the indirect impacts of ICTs on economic growth, exports and other macro variables in the economy. It also examines direct employment prospects in the ICT industries, particularly in the context of India, which appears to have made some breakthroughs in the software development business. The paper reviews a number of "case stories" to illustrate the potential direct impacts of ICTs in the areas of livelihood, employment, education, health, governance and empowerment of the poor. The limitations in some of the more detailed "stories" are also evaluated. For instance, many projects highlighted by the case stories are still at a demonstration phase and require a broader evaluation framework. Further, in many application areas, ICTs have clear trade-offs against other development priorities, while being complementary in others. Governance and education are two areas where ICTs can be significant complements to traditional systems. The paper also undertakes cross-country statistical analysis of socioeconomic factors influencing the adoption or usage of ICTs. The principle determinants are found to be income and investments in human resourcesparticularly in secondary and tertiary educationand physical infrastructure. These findings have strong implications for policies. While conventional development thinking emphasizes primary education as a critical ingredient of economic development, the present analysis suggests that taking advantage of the economic opportunities afforded by new ICT industries requires much more beyond primary education. However, many other standard development prescriptions remain valid. These include the importance of a well-developed infrastructure, a strong educational system and fewer government regulations. The paper's overall conclusion is, however, somewhat circumspect. While there are many direct benefits to ICTs, it is not often clear whether they are more efficient or cost effective than traditional means. It is also not often clear whether the poor have the financial and educational wherewithal to take advantage of the economic opportunities provided by new ICTs. V
doi:10.1080/1354786022000007852 fatcat:7u6xruaejzgtdprjjjyd57efva