Links Between ICT, Poverty and Development

This section explores the linkages between the new ICTs and poverty reduction. Can the potentialities of ICTs be exploited to enhance the development prospects of poor countries or more particularly the well-being of the poor in those countries? Some clearly believe that technology has a great deal to offer:

“This new technology greatly facilitates the acquisition and absorption of knowledge, offering developing countries unprecedented opportunities to enhance educational systems, improve policy formation and execution, and widen the range of opportunities for business and the poor” (World Bank, 1999:9).

ICTs have been recognised as having a role to play in broad-based, cross-sectoral poverty-reduction strategies and universal access policies are being promoted to improve rural access to ICTs (Kenny, Navas-Sabater & Qiang, 2000). The World Bank (1999) and the UNDP (1999) assert that ICTs have the potential to improve the welfare of the poor in a number of ways. These include: (i) opportunities to increase social capital; (ii) improved availability of market information; (iii) creation of new economic opportunities; (iv) improved economic efficiency and competitiveness; (v) better access to health and education facilities; and (vi) more efficient and effective governance (Grace et al., 2001; Analysys, 2000; ILO, 2001).

It is claimed that ICTs can improve governance in three distinct yet overlapping ways (Heeks, 2003; Heeks, 2000). First, they assist decision-makers in the acquisition, management and transmission of complex policy information and data, thus creating efficiency benefits. Second, they improve the delivery of government services.

Third, they empower civil society by raising access to government information and facilitating dialogue and public feedback on government projects and performance.

The combination of these three factors results in potential benefits in sectors such as education, health-care and environmental preservation.

Between 1995 and 1997 the United Nations Commission on Science and Technology for Development (UNCSTD) investigated claims and counterclaims about the benefits and risks of ICTs (Mansell & Wehn, 1998). Members of the Commission’s Working Group on IT and Development examined the available evidence on the experiences of developing countries. They found that there are many instances where the use of ICTs is bringing social and economic benefits. However:

“[T]here are as many instances where ICTs are making no difference to the lives of people in developing countries or even having harmful effects…there is a very high risk that these technologies and services will deepen the disadvantages of those without the skills and capabilities to make the investments required for building innovative ‘knowledge societies’” (Mansell

& Wehn, 1998:1).

Avgerou and Walsham (2000:1) claim that ICTs “offer significant potential benefits for socio-economic development” in such fields as business development, transport, agriculture, health, education, and human resources and environmental management.

Moreover, it has been argued that the new technologies can be implemented to support democratic decision-making, more effective governance and lifelong learning, and to enhance the possibility of sustainable development (Grace et al., 2001). The results are, however, mixed. While some groups of people in developing countries are being empowered through their use of ICTs, others are being disempowered (Gómez, Hunt & Lamoureaux, 1999; Heeks, 1999a). There is a risk that the diffusion of ICTs and the transition to knowledge-based development will exacerbate existing social and economic problems (Mansell, 1999). For example, the least developed face enormous risks of exclusion because they often lack the economic and social capabilities needed to take advantage of innovations in ICTs. Developing countries will need to find ways of combining their existing social and technological capabilities if they are to benefit from the potential advantages of ICTs.

While ICTs can improve the delivery of basic services such as health care, they require an underlying traditional system with trained medical personnel to interpret or make use of that information. Basic services such as health care, doctors and hospitals have to pre-exist before ICTs can be utilised to improve their delivery. ICTs cannot tackle other basic needs such as food, nutrition and access to water supply.

There are indeed aspects of such basic needs that require the development of physical infrastructure, to which ICTs may have little or nothing to contribute. ICTs can

improve the employment situation and help in the education arena (ILO, 2001). The direct employment effect of ICTs in the poorer countries, however, has so far been limited and largely been restricted to those with some education (Heeks, 1999a).

ICTs can improve education through distance education or local (computer-assisted) learning systems. This, however, would require trained and computer-literate teachers.

The evidence in support of a strong relationship between investment in advanced ICTs by developing countries and economic growth, at least at the macroeconomic level, has been found to be very weak (KPMG, 2000; Mansell, 2001).⁴⁸ According to Kraemer and Dedrick (2001) ICT capital shows no significant correlation with productivity in developing countries. Rodriguez and Wilson conclude that:

“the link between ICTs and society-wide economic progress has been more elusive. Our study confirms what many researchers have found for developed countries, namely a lack of association between economic growth and use of ICTs” (Rodriguez & Wilson, 2000:2).

Pohjola (2001), for example, investigated the relationship between IT investment and growth in 39 countries over the period 1980-1995 and found a paradoxical result.

Whereas IT investment appears to boost growth in developed economies, the same is not necessarily true in developing countries, which need to institute other complementary policies to reap economic benefits from such IT investments. This is partly attributable to the fact that it is difficult to establish an empirical link between the diffusion of digital ICTs and economic development on the basis of available data.

It may also be due to the fact that the positive effects of the global extension and consolidation of digital networks take time to accumulate (Rodriguez & Wilson, 2000).

Seen from the perspective of economics, the Internet has been widely regarded as a major force likely to raise productivity. However, at least so far, the identifiable

48The contribution of ICTs to an economy-wide productivity growth in the US has been the subject of a number of recent empirical studies (see Cohen, DeLong & Zysman, 2000). These productivity studies are fraught with many conceptual and data difficulties, and were largely spurred by the Nobel Laureate Robert Solow. In 1987 Solow (1987:36), in a book review, famously stated: “You can see the computer age everywhere but in the productivity statistics”. The failure of massive investment in IT to boost productivity growth has came to be known as the productivity paradox.

effects on productivity appear small and largely confined to the US (Graham, 2001).⁴⁹ Identifying these effects proves remarkably difficult, especially as there is a host of measurement problems involved in assessing the impact of the new technologies on output and productivity. Nevertheless, it is important to keep in mind its relatively limited effect on conventional growth measures, at least so far.

It has been suggested that developing countries would also experience a similar, even a greater, shift in productivity if they incorporated ICTs more comprehensively in their production structure (Cohen, DeLong & Zysman, 2000). How realistic is such an idea? For this to happen, they would require sufficiently well-developed social and physical infrastructures as well as conducive policy and institutional frameworks. As data on ICT diffusion indicate (Table 4.3), the diffusion rates in most poor developing economies remain abysmally low to make such a transition to the new technology regime feasible in the immediate future. Diffusion would require substantial investments in related physical infrastructures as well as human capital much beyond the present capacities of many developing countries. Even if such resources were available, the impact would be far from immediate. These economies would need a considerable amount of time to assimilate the technology, reorganise their production structures, reconfigure their organisational structures and adjust management practices in line with the new technologies. In the transition period there are likely to be substantial adjustment costs in terms of production disruptions and unemployment.

In short, however tantalising the idea of technological leapfrogging may be, it will entail a radical development strategy involving an across-the-board adoption of ICTs in the economy. However, such a strategy may not be feasible or desirable for all developing countries. It may not be feasible because it may entail changes in skills and organisational structures of these economies much beyond their present capacities. It may not be desirable because many of these activities entail substitution of one medium with another, with different implications for labour demand. Many of these substitutions would reduce the demand for unskilled labour, which may not be desirable for a country struggling with a large unemployment problem.

49 And in fact, one large study showed that sectors of the US economy that have invested most in ICTs have seen smaller than average productivity gains (Jorgenson & Stiroh, 2000:125).

ICTs can help pro-poor institutions listen to the poor, engage in more meaningful dialogue and build consensus and mutual understanding around development objectives. Integrating ICTs into local knowledge and information systems in order to address locally identified knowledge gaps and information problems, and encouraging partnerships for local appropriation of the technology and content with the necessary training and support, are major challenges. The network architecture that has been adopted by global capital can also be used to link the disempowered (Brecher, Costello & Smith, 2000:86). The importance of supporting the voice of the powerless and allowing communication between those usually reliant on information from a powerful central agency is confirmed by Chambers (1999) and Hamelink (1996).

Hamelink (1996) uses the idea of human rights to argue for developing the right communication as fundamental to all in the ‘network society’. The ability of the powerless to describe their own situation and to share experiences with others in similar circumstances is a powerful step in developing strategies to benefit the marginalised.

It should be noted at the outset, however, that there is a serious deficiency of strong empirical support for this position as of yet. There are a number of concerns. First, there are reasons to believe that the Internet might act as a technology of divergence.

Certainly the spread of the new ICTs will create winners and losers. The rural poor are especially vulnerable. Second, ICT, poverty and development projects are very complex and prone to failure (Heeks, 2002b). Although there are great complementarities between ICTs and economic and social progress, there are also important trade-offs between equity, well-being and the unhindered development of ICTs. Simple claims about the links between ICTs and progress are therefore not correct and may in some cases be dangerously wrong. While the assertion that information is an important focus for sustainable development strategies is not particularly contentious, defining the role that information should play is somewhat more challenging. It is not only a question of whose reality (Chambers, 1983, 1999) the information reflects, but who is able to make use of that information and for what purpose?