Executive Summary

This Report is a non-technical summary of research that explores whether there is an information and communication technology (ICT) gap between rich and poor countries, and whether that gap is growing or shrinking. It also discusses the link between that gap and gaps in income, both within countries and across them.

After defining this gap to include both ICT products and outputs (e.g. Internet, cellular phones, etc.) as well as inputs (engineers, scientists), we analyze the experiences of over a hundred countries. At the end of the paper we draw out some policy implications of our empirical findings for multilateral and bilateral agencies. We conclude:

1. All developing countries, even the poorest, are improving their access to and use of modern ICTs, some at a dramatic rate. In virtually every country in the world, more individuals enjoy access to ICT today than ever before.
2. However, the gap between the rich OECD countries and the poor developing countries is growing, both in terms of ICT products as well as in terms of incomes. The coincidence of these two trends is suggestive, but a decisive causal link cannot be established.
3. Although these new technologies appear to be improving economic performance and welfare among the user populations, 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. A possible hypothesis is that the consolidation of the networks necessary to take advantage of these technologies takes time to form and that their positive effects will be felt in the longer run.
4. It is quite clear that countries with similar levels of per capita incomes and economic structures exhibit wide variation in their ICT performances. Some developing countries are surging ahead while others are falling behind. We identify the pro-ICT policies that appear to be causing these differences in outcomes. In particular, we show that countries enjoy greater technological progress when they produce:
   1. A climate of democratic rights and civil liberties that is conducive to innovation and adaptation of ICTs.
   2. Respect for the rule of law and security of property rights.
   3. Investment in Human Capital.
   4. Low levels of government distortions.

   However, we also find that many of these links are complex. Although there are great complementarities between ICT and economic and social progress, there are also some important trade-offs between equity, well-being and the unhindered development of ICTs. Simple claims about the links between ICTs and progress are not correct, and may in some cases be dangerously wrong.

5. In two areas we lacked sufficient data to reach firm conclusions, but we can hazard educated guesses. We cannot tell whether the ICT gap is growing internally within countries between the rich and the poor; nor can we tell decisively whether ICTs are contributing to greater equality of incomes at national levels. However, we do know that comparable studies in developed countries suggest that information technologies can cause substantial increases in inequality. Whether this effect will be reversed in the long or medium run is still an open question.

A continuation of existing trends in the ICT have/have-not gap may contribute to a number of social problems including skewed economic outcomes and enhanced risk of social and political conflict. While the bad news is that the global equity problem is getting worse, the good news is that international and national bodies have an improved understanding of policies that can expand and accelerate the distribution of ICTs to poor populations in developing countries.

There is an ICT equity problem. There is a growing sense of urgency about the problem. And there is knowledge about how to reduce the problem.

Bytes For All Readers 7/28/02.