The United Nations Conference on Trade and Development ended its recent confab in Brazil with pious warnings that limited access to new information technology is a major impediment to closing the income gap between rich and poor nations.
This is the sort of claptrap that has gives some U.N. agencies a well-deserved reputation for irrelevance.
Yes, new information technology can spur economic efficiency and thus faster growth. Yes, some specific areas in IT can provide unique solutions to problems of the poorest countries.
But, if one were to weigh 20 or 30 possible changes that might improve the incomes and well being of people in poor countries, greater access to IT would fall near the bottom. Moreover, in many countries, greater investment in IT will have low returns for society as a whole unless other, more fundamental changes occur first.
Such pronouncements about an international “digital divide” stem from fundamental misconceptions about why some economies prosper and others remain mired in poverty. It is seductive to think technology can solve problems of underdevelopment.
Perhaps this fallacy stems from experiences after World War II. If Great Britain, France, Italy, Germany and Japan rapidly recovered from wartime economic devastation by rebuilding bridges, mills, factories and power plants, then constructing such infrastructure in any poor country would foster similar rapid growth.
But Colombia, Cameroon, Cambodia and so forth were not poor because of war damage. They were poor because they never had been able to establish the political, social and economic institutions necessary for rapid economic growth to occur.
Such institutions include clear property rights, the basic rule of law, an effective judiciary, and economic policies that favor savings and investment. Some degree of transparency or predictability in government helps, though countries such as Korea, Taiwan and China achieved sustained high rates of growth as dictatorships.
Without such institutions, infusions of capital and technology — whether as paved roads and hydroelectric dams or cell phones and the Internet — really don’t make a lot of difference. Bolivia and Burundi are not poor because they lack access to technology. Nor are they poor because their citizens are lazy or unintelligent.
They are poor because their countries’ political cultures, often clearly rooted in bitter historical experience, militate against both economic efficiency and economic justice.
In fairness to the U.N. conference, the communiqué also noted other, more substantive, issues including barriers to trade among developing countries themselves and the de facto protectionism of wealthy countries that talk a strong free-trade line.
The danger is that headlines devoted to international “digital divides” appeal to breast-beating ethnocentrism in North America and Europe. The more wealthy people believe that differential access to IT is an important cause of poverty, the longer it will take before attention is paid to more fundamental problems.
© 2004 Edward Lotterman
Chanarambie Consulting, Inc.