The Digital Divide : Causes and Symptoms

Bridging the Digital Divide appears to be the stock in trade heading these days of too many reports and conferences and meetings. Every blessed project name seems to have a e- prefixed to it. From e-governance to e-learning to e-this, e-that, e-the-other. It is all very e-boring. One wonders as to the e-cause and therefore I think we should do a bit of e-seeking for some e-explanation.

The next time I see another e-scheme, I will be ready to e-scream.

Seriously, here are what I believe to be the reason for this fixation with the so-called digital divide, in no particular order. First, it is a simple case of ‘to a person with a hammer, every problem looks like a nail.’

Practically everyone involved with anything to do with development (except the direct beneficiaries of development) has some facility with ICT. So therefore they start to believe that every problem has a solution that is ICT related.

The next explanation is what I call the bank robber phenomenon. When some famous bank robber was asked why he robbed banks, he simply replied because that’s where the money was. ICT projects are the most lavishly funded. And therefore, it attracts the most attention from people who would like to get a piece of the action.

Another part of the explanation is what I call the drunk looking for his key scenario. A man evidently drunk was seen searching for something under a lamp post. When asked he said that he lost his keys under the trees over there. But why was he searching for them under the lamp post? “Because,” he said, “it is easier to look for it under the light.”

Definitely, part of the explanation has to involve simply not recognizing that the digital divide is merely symptomatic of some other underlying cause. But it is too bothersome to seek to understand that cause. And even if the cause is as plain as daylight, it may be too difficult to deal with the cause. So one gets busy addressing the symptom.

Addressing only one symptom (the digital divide) while neglecting to understand the causes leads to spectacles that are reminiscent of the south seas cargo cults.

During the war, the natives of some South Pacific islands had noticed a curious phenomena. They had witnessed some people prepare a long piece of land and mark it with flares and fires. Then someone with cups on his ears would talk into a device and soon planes would land in the clearing and disgorge cargo. When the war was over, the natives decided that they needed cargo. So they made headphones out of coconut shells and radio receivers out of bamboo and lit the fires around the clearings. They haven’t had much sucess in getting cargo yet, but they believe that the cargo would appear just as soon as they can duplicate the equipment better.

I do not believe that merely going through the motions, however sincerely, of bringing ICT to rural populations would magically transform the rural economy. Focusing on the digital divide could indeed be counter productive in that resources that could have been better employed would be wasted in inappropriate ventures.

I should hasten to add that there is indeed a digital divide. But we must also recognize that there are other divides as well, such as a nutritional divide, a gender divide, an income divide, an education divide, and so on. All these divides are interrelated and there are strong dependencies. It is a second best world out there and it is easy to fall into the trap of seeking first-best solutions in a second-best world.

I will discuss why I believe that ICT tools are most suited to address the complex set of problems which cause all the divides, including the digital divide. My contention is this: we need to focus on the understanding the underlying reasons for the underdevelopment of rural areas. Having done that, we then need to figure out the best use of our limited resources to bring to bear the most appropriate tools for addressing the causes. If we do that, then we would have bridged all the divides, including the much talked about digital divide. It may turn out that ICT tools are the most appropriate in many areas. But a priori assuming that ICT tools are always appropriate is silly and sometimes tragically too expensive.

For now, I cannot find a more succinct depiction of the misplaced emphasis on the digital divide than this cartoon by the incomparable R K Laxman.
“I am hungry … if we had a computer, we could have ordered food through a website.” }

The Need to do Arithmetic

John McCarthy of Stanford University has the following in his .signature file:

Those who refuse to do arithmetic are doomed to speak nonsense.

Over the years I have seen too many instances of errant nonsense that a little bit of arithmetic would have prevented. I think that the power of arithmetic is not fully appreciated. Even people in very powerful positions utter complete nonsense when they refuse to do simple calculations.
Continue reading “The Need to do Arithmetic”

Myths, Misconceptions, Misunderstandings, and Misapprehensions

To confront the cliches and shibboleths of one’s age is neither easy nor rewarding. The emperor’s new clothes exist only in the imagination of those committed to maintaining an obvious falsehood for fear of falling out of favor. I believe it is time that we examine some of the ICT related myths that drape the development emperor. I will categorize them as myths, misunderstandings, misconceptions, and misapprehensions and number them randomly. I may even intersperce them with some facts.

Misapprehension #78: There is a digital divide and it is the cause of retarded development. Hence, if we bridge the digital divide, development will occur.
Continue reading “Myths, Misconceptions, Misunderstandings, and Misapprehensions”

The Question: ICT for Development?

Yesterday I noted one question posed at the Policy Makers’ Workshop:

Can ICTs be useful for rural and remote areas of developing countries, especially the poverty-stricken regions?

We need to examine that question for a moment. At one level of analysis, it is hard to not answer that question in the affirmative. At another level, it is a meaningless question. Merely because it is syntactically correct does not imply that it has any content. Consider the question:

Can magnetic levitation superfast monorail transportation systems be useful for rural and remote areas of developing countries, especially the poverty-stricken regions?

Clearly, yes. Not just magnetic levitation superfast monorail transportation systems, but an almost unending variety of things would be useful for the development of poverty-stricken remote areas. Not merely for those areas, all of those unending variety of things would be useful for the development of not so remote and not so poverty-stricken areas of any developing country. Thus that question is actually content-free.
Continue reading “The Question: ICT for Development?”

Chennai “Policy Makers’ Workshop”

The digital divide seems to be all the rage these days. Take for instance the recent two days I spent in Chennai. The M S Swaminathan Research Foundation (MSSRF) had organized a Policy Makers’ Workshop at their campus in Chennai on October 8th and 9th. The workshop was supported by two “Canadian crown corporations”, the International Development Research Centre (IDRC), and the Canadian International Development Agency (CIDA). (Those two have a budget of about Canadian $100 million.)

The workshop was a great opportunity to meet many people from the goverment ranks, the private sector, and various NGOs. It was an honor to meet Prof. M.S.Swaminathan, of course. Two days is sufficient time to get to know at least a couple of people well. I was fortunate that I met many people who I would like to follow up with.

The information package for the workshop asked (among other questions):

Can ICTs be useful for rural and remote areas of developing countries, especially the poverty-stricken regions?

The two days gave me an opportunity to reflect on the issues that the participants raised. I think it would be useful for me to create a framework within which I can discuss the various specifics of debated by the participants of the workshop. I will do so in a seemingly roundabout way because what I would like to do is not what a journalist or a reporter would do. I am seeking to explain something that is not trivial, neither in its conception or its impact. So it may be many days before I can say that I have made the point that I have set out to make.

The Dismal State of the World

From a recent speech by the World Bank President, Mr. Wolfensohn, one learns a number of facts about the world. For instance, 80% of the global GDP is owned by about 1 billion people (or 1/6th of the world’s population.) About 1 billion live on less than $1 a day.

The rich are not only fewer in number, but their numbers are projected to increase much slower than the increase in the number of poor. In the next 25 years, the rich nations would add only 50 million people more; thirty times that number, or 1.5 billion, would be added to the population of the world’s poor nations. That would only go to increase the poverty figures. Especially in sub-Saharan Africa, the absolute number of poor will actually grow. They are not going to meet the Millennium Development Goals for sure.

Development assistance from the the rich nations to the poor is an impressive $56 billion a year. That figure is no longer impressive when you learn that agricultural subsidies that rich farmers receive worldwide is $300 billion. That subsidy is at least a major factor in the impoverishment of the farmers in developing countries. In a globalized world, there is a strong link between agricultural subsidies in rich nations and the farmer suicides that are periodically reported in some developing nations.

Whatever be the dismal state of affairs, what is more disturbing is the trend. Development assistance fell from 0.5% of GDP of rich nations in the early 1960s to a mere 0.22% today. Compared to $56 billion of assistance, the world spends $600 billion on ‘defense’. Weapons’ spending dwarfs development spending worldwide.

It is important to recognize that one of the leading factors of the persistent and ubiquitous misery globally is the ‘defense’ expenditure of nations both rich and poor. All the futzing around with bridging the so called digital divide is pointless unless we also simultaneoulsy deal with the fact that we are awash in an ocean of weapons.

Overtaking China

Here is another bit from Anand’s comments.

The collective leadership that is fueling china’s growth today will have to go away in the future. Communism is not going to last long enough for china to become a developed nation. Once communism collapses and democracy begins to form in china, there will be a prolonged period of little or zero growth in the country’s economy.

That is when India will overtake china.

It is very likely wishful thinking combined with admirable patriotism that motivates Anand above. The engine of communism has been decoupled from the Chinese train long ago and it is the engine of capitalism that is driving that one. As Pranab Bardhan had observed, the Chinese were better socialists than Indians, and now the Chinese are proving to be better capitalists than Indians.
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The Development Path of Economies

Anand’s comment in response to a past posting prompts this one. He wrote:

The fact that manufacturing accounts for such a small percentage of India’s GDP is not a minus but a plus. All the industrialized nations have seen manufacturing as a percentage of GDP shrink.

There is much misunderstanding about the process of development and it may be worthwhile to start thinking about development. (What follows is partly from another article I had written some time ago.)
Continue reading “The Development Path of Economies”

Crouching Tiger, Lumbering Elephant

In Crouching Tiger, Lumbering Elephant, an essay which recently appeared in a collection, Pranab Bardhan of UC Berkeley (one of my advisors during my doctoral work there) compares India and China while leading up to the main thesis of the paper. He concludes that

By most criteria of standard economic measurements of levels of living and their growth, China has clearly won the race.

To support his conclusion, he notes

Over the last three decades official data suggest that the average annual rate of growth of per capita income was about 7 per cent in China1 and 2.5 per cent in India. Productivity per hectare in agriculture (say, in rice) has been much higher in China for centuries, but the relative progress in manufacturing in recent decades has been phenomenal. In the early fifties the total GDP in manufacturing in India was slightly below that in China , in the late nineties it was less than a quarter of that in China. In 1999 the manufacturing share of GDP was 38 per cent in China, while it was 16 per cent in India. Indian labour productivity in manufacturing was about 71 per cent of that in China in 1952; in 1995 it was 37 percent2. Compared to India, total electricity use per capita is twice as high in China and teledensity (the number of telephones per thousand people) is several times higher. In 1999 the share of world trade (exports plus imports) in goods was 3.3 per cent for China, 0.7 per cent for India; in services the corresponding percentages were 2.1 and 1.2. The total amount (in dollars) of foreign direct investment in China was 18 times that in India in 1999. In the same year gross domestic saving as a proportion of GDP was exactly twice as high in China as that in India.

… The social or human development indicators all indicate the superior performance of China. The life expectation at birth is about 70 years in China, to India’s 63. Under 5 child mortality (per thousand live births) was 37 in China and 90 in India in 1999. Female illiteracy for above age 15 was 25 in China and 56 in India in 1999.

Dismal reading if you are an Indian wondering what went wrong. Bardhan’s thesis is that China has been better able to resolve collective action problems.

I have been convinced for many years that both at the macroeconomic level of political economy and the micro level of management of public space in general and of common property resources in particular , one of the most serious problems that Indian society faces is that of collective action. At the macroeconomic level collective action is necessary in formulating cohesive developmental goals with clear priorities and avoiding prisoner’s dilemma-type deadlocks in the pursuit of commonly agreed upon goals.

He had analysed India’s fiscal crises and development gridlock as an ‘intricate collective action problem in an implicit framework of non-cooperative Nash equilibria’ nearly two decades ago. In his judgement, Indian reform would lumber along, clumsily and haltingly. It is a despiriting conclusion reached by one who knows something about India and economics.

What interests me particularly in the paper is his identification of China’s township and village enterprises (TVE’s) as an important institutional innovation that has changed China’s fortunes. These are non-state industrial enterprises under local government (and sometimes semi-private) control.

Take the TVE’s which formed the leading sector in the industrial economy in the last two decades. I believe that the clue to their dramatic success particularly in coastal China lay in three major elements of this unique institutional experiment: (1) there was intense competition among the TVE’s run by different local governments; (2) this competition had teeth (unlike , say, in the case of the competition of public sector banks in India) in the sense that there was a “hard budget constraint” imposed on them, so that by and large a failing TVE could not expect a bailout by the provincial or central government (although there was some cross-subsidisation between enterprises within the same township or village); and (3) when the TVE made money, the local authority was largely allowed to keep most of it (residual claimancy without private ownership was the novel institutional feature).

Institutional innovation is what India chiefly needs. Like China’s TVE’s, we too have to find our innovation that would transform India’s economy. Since rural India is demographically larger, we need to focus on rural India seriously. Some of us are convinced that something like the RISC model is the appropriate innovation that needs to be implemented.

Creating the Conditions for ITES in AP

In a special report on Andhra Pradesh in the Financial Express in May 2003 called Towards Swarnandhra Pradesh the focus of one article is on Hyderabad becoming India’s ITES capital :

With the telecom bandwidth in excess of deand, the focus would be towards creating high quality office space with amenities like high-speed telecommunication links, uninterrupted power supply etc which are critical to attract the ITES companies.

Towards this, the State government is holding talks with leading real estate developers including Rahejas of Mumbai, DLF of Delhi apart from Larsen and Tubro Infocity for high-quality office spaces in and around Hyderabad.

So what AP is trying to do is to create the environment so that businesses — ITES — would locate themselves there because of the lower cost of doing business. In a sense, it is a no-brainer: if you have the proper environment, business will develop. However, this environment will not emerge automatically on its own. That is, the market will not supply it spontaneously. Why the market fails to do this? It requires collective action. Or in other words, it is a coordination problem.

RISC is motivated by similar concerns in the rural arena. For doing business in rural India, you need to have adequate infrastructure. Given the immense investment needs, every village cannot be transformed. So a core-peripheri approach is required. Further, RISC also stresses the same coordination failure in the provisioning of infrastructure in rural India.

Mark Twain had once remarked that there are fundamentally only three archetypical jokes. (I forget what those archetypes are, but one of them was the ‘mother-in-law’ joke.) So also, there are a small set of basic problems. These show up repeatedly in various theaters in different guises. Once you recognize them, the solution is pretty much the same. Why people don’t get this is a question that I have not fully been able to fathom.

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