Does the global digital divide have anything to do with progress in development

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Does the global digital divide have anything to do with progress in development
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  The Blind Men and the Elephant “It was six men of Indostan To learning much inclined, Who went to see the Elephant (Though all of them were blind), That each by observation Might satisfy his mind” John Godfrey Saxe's (1816-1887) version of the famous Indian legend.   DOES THE GLOBAL DIGITAL DIVIDE HAVE ANYTHING TO DO WITH PROGRESS IN DEVELOPMENT? Maria F. Trujillo, PhD. April 11, 2003 Since the 1950s poverty alleviation (otherwise known also as poverty reduction) has been the cornerstone of development strategies adopted by multilateral and bilateral aid agencies. Over the last years of development strategies, there has been a series of different approaches driven by the paradigm of economic growth to address the poverty alleviation issue. For example, in the 1950s and 1960s, with a modernization theory as a  backdrop, large investment in physical capital and infrastructure was the favored instrument for fast economic growth and poverty reduction. In the 1970s, development specialists realized that physical capital itself was not sufficient and that human capital was equally important. There was a major shift of investment funds from physical infrastructure projects to those that focused on the development of human capital. Countries found themselves suddenly short of funds to supplement or continue with the large projects initiated under earlier initiatives. The telephonic and electric infrastructure, for example, stopped growing at the same speed of the demand. (Duraiappah 2000) By the end of the 1970s success was still limited and a search for a new approach was initiated. The 1980s saw the full realization and implementation of the “Washington consensus” in an era of globalization, defined by some as a “pattern of technological  progress” (Bhalla 2002). Emphasis shifted from state-dominated planning models to decentralized decision-making with the market as the efficient invisible hand. High  priority was placed on trade liberalization and privatization of the economy. The sudden opening of markets caused many countries with little market experience to go through some difficult and traumatic times. At the same time, governments in a large number of developing countries found themselves pressured to disassociate themselves from many  projects initiated over the previous three decades. Infrastructure projects advanced at a stagnant speed, while local business found themselves competing in an open market for which they were not prepared. The slow adoption of the free market doctrine, together with the East Asian crisis, initiated the focus on good governance and its role in accelerating economic growth. Governments in a majority of developing countries now needed to fulfill conditionality requirements before they are eligible for aid. This required them to change or modify institutions in relatively short time frames, which created  Does the global digital divide have anything to do with progress in development? Maria F. Trujillo 2 economic, political and social disruptions in the economies. As some of the more recent authors suggest, the effects of globalization on poverty allow different types of analysis which a variety of results. It is unclear whether individual income levels are converging or diverging, and the role technology plays in this: “This central idea of convergence deserves emphasis. Growth theory (both new and old) tells us that countries with lower technologies and incomes will, via openness and sharing of the same global technology, grow at a faster rate than rich economies; that is their productivity growth will be higher, often considerably more that experienced by the 'frontier' industrialized economies (e.g., the United States). The assertion that globalization should lead to greater global income equality is admitted to by most Washington Consensus economists.” (Bhalla 2002, p.22) By the end of the century, the prominent role played by information and communication technologies (ICT) in each of the development strategies became evident, as well as its relation to the access, adaptation and creation of knowledge to stimulate development and economic growth. On the other hand, there was a growing consensus acknowledging the existence of a global digital divide. A gap produced due to unequal capacity among countries to access, adapt and create knowledge via the use of digital information and communication technologies. Inequalities among countries due to differences in their capacity to access information and knowledge have always existed. Whereas in 1998 a U.S. medical library subscribed on average to about 5,000 journals, the Nairobi University Medical School Library, long regarded as a flagship center in East Africa, received only 20 journals (compared with 300 a decade ago). In Brazzaville, Congo, the university had only 40 medical books and a dozen journals, all from before 1993, and the library in a large district hospital was a single bookshelf filled mostly with novels (UN 1999). The new component in the historically unequal capacity among countries to access knowledge is the new type of digital infrastructure required to increase a country’s capacity to access knowledge. The infrastructure required to bridge the divide created by differences in access to knowledge and information in the developing world is a whole set of complementary digital and non-digital infrastructures that enable storing,  processing and communicating information and knowledge in new ways. To this day, the relation between the use of digital ICT, progress in development, economic growth and poverty reduction remains a discourse in policy circles, yet very little empirical work has been carried out to prove or disprove the nature of the relation. This paper presents findings from an empirical exploration of this relation. The “Development Divide” According to United Nations (UN) classification, in 1997 the developing world consisted of 124 countries (out of 174) collectively accounting for 78.39% of the world’s  Does the global digital divide have anything to do with progress in development? Maria F. Trujillo 3  population. A closer look  1  reveals that in 1997 more than 85.34% of the world’s  population (more than 4.9 billion people) lived in developing countries, whereas only 14.66% lived in industrialized countries. Furthermore, among developing countries, there is another UN subset that classifies 43 countries as least developed countries (which in 1998 accounted for the poorest 10.2% of the world’s population). The Human Development Index (HDI) produced by the UN is also used to classify countries as: highly developed (HDI between 0.800 and 1.000), medium developed (HDI  between 0.500 and 0.799) or low developed (HDI between 0 and 0.499). This classification places the majority of countries (71.20%) as countries with medium levels of development, whereas 17.73% has high levels of human development and 11.07% low levels of human development. Over the last decade, not all countries that started at similar levels of human development (or HDI) in 1990 made progress at the same speed. Progress in human development may have occurred due to growth in any of the following dimensions: income per capita, adult literacy rates, gross primary enrolment, gross secondary enrolment, gross tertiary enrolment, and/or life expectancy at birth. Development trends 2  from 1975 to 1999 (UN 1999; UN 2000; UN 2001) reveal that all countries but Zambia (which is explained by declines in both economic and health indicators) have higher values in 1998 than in 1975. This however does not necessarily indicate that during the last decade, there were equivalent increases in human development across all countries 3 . From 1990 to 1997, sixteen countries experienced declines in human development. The Human Development Report suggests that these decreases are due to the HIV/AIDS  pandemic (mostly in Sub Saharan Africa), or economic stagnation present in Sub-Saharan Africa, Eastern Europe and the Commonwealth of Independent States (CIS). The HIV/AIDS pandemic’s effect is captured by declines in life expectancy in countries such 1  In spite of having comparable levels of development, the UN classification for countries belonging to the developing world does not include countries from the Former Soviet Union, i.e. the Commonwealth of Independent States (CIS). If we were to consider Eastern Europe and CIS countries as developing countries, this would mean considering twenty five countries of Eastern Europe and the Commonwealth of Independent States as part of the developing world: Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Latvia, Lithuania, and Macedonia (TFYR), Moldova, Poland, Romania, Russian Federation, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. 2   The HDI is a composite index constructed for countries for a particular year. The maximum and minimum values that define the maximum distance for each indicator included in the index is specific for that year. Due to changes in the values of the maximum and minimum values of these variables, measuring  progress in human development is not a mere subtraction of indexes. Thus, if we are measuring progress  between 1990 and 1997, the minimum and maximum of all values for all 75 countries are used for the construction of the index of progress of human development. Multiyear averages of growth rates are expressed as compound annual rates of change, whereas year to year growth rates are expressed an annual  percentage changes. 3  Percentual rates of progress were measured following UN methodology that compares the reduction in shortfall (1-HDI) of the Human Development Index (HDI) value for both years. Rates of progress are relative to the starting point. The starting point can be either: high development (HDI between 0.800 and 1.000), medium development (HDI between 0.500 and 0.799) or low development (HDI between 0 and 0.499).    Does the global digital divide have anything to do with progress in development? Maria F. Trujillo 4 as: Zambia, Zimbabwe, Uganda, and Botswana; whereas economic stagnation during 1990 to 1997 is captured by decreases in GDP per capita which reached their lowest value since 1975 in countries such as: Azerbaijan (1995), Belarus (1995), Bulgaria (1997), Kyrgyzstan (1995), and Tajikistan (1996). A slow rate of progress (such as 10.2%) for developed countries (such as Canada), is comparable to the fastest rate of progress (10.1%) for less developed countries (Laos). Countries that in 1990 started with high human development such as Australia, United Kingdom, Norway, Singapore, and Sweden, by 1997 had the overall highest rates of  progress (ranging from 35% to 30.8%). None of the countries that in 1990 started with high levels of development had declines in development. Surprisingly, the largest declines in development are not found among the countries that in 1990 started from low development, but in countries that in 1990 started from medium development such as Azerbaijan, Botswana, Russian Federation, Latvia, Belarus, and Zimbabwe (ranging from  –24.63% to –12.56%). Slowest progress rates (ranging from 1% to 4%) are among countries that in 1990 started in low and medium development levels; whereas slower  progress rates (4.6% to 15%) in highly developed countries are similar to the fastest rates (6.35% to 10.09%) in low developed countries. Differences in rates of progress relative to starting points and categories are illustrative of the type of analysis that has to be carried out in developing countries 4 . Analysis that does not consider where a country started or what category it belongs to, will miss important elements of the explanation of the rates of progress over years. A rate of progress in human development is not an absolute value, it is a relative to a starting value. In sum, from 1990 to 1997, the majority (89.09%) of countries made some kind of  progress in human development, leaving only 10.91% of countries with declines in human development. Does fast or slow progress in human development have any relation to the use (or non-use) of Information and Communication Technologies (ICT)? The following findings are product of a quantitative exploration of the relation between overall development indicators, rate of change and the use of ICT. Deciding what to measure: the core of the global digital divide (national computing and networking capacity) The first question was to establish the nature, strength and direction of the relation  between national core computing and networking capacity and absolute levels of national human development, as well as progress or declines in the rate of progress. One of the many components of an info tech infrastructure, national computing and networking capacity for 120 countries was measured using Core-ITP 5 . This core info tech 4   Following UN methodology, progress in human development was measured as percentual increases in what a country was missing in achieving full development. Full human development would be equivalent of having a Human Development Index (HDI)=1.This is why progress in human development is called “reduction in shortfall” by the UN.   5   Core national and computing infrastructure is measured using Wilson and Rodriguez’ Core Index of  Does the global digital divide have anything to do with progress in development? Maria F. Trujillo 5 infrastructure (IT-infrastructure) requires an underlying “wired” infrastructure provided  by electrical and telephonic grids, therefore another national telecommunication index was constructed using main telephone lines per 10,000 habitants 6  and the electrical consumption per capita in 1990 and 1997 was taken from the World Bank 1999 Report to construct an index of electrical consumption per capita. A correlation analysis demonstrated that wired variables (electricity and telephone grid) and national computing and networking capacity (Core-ITP) were highly correlated among each other. The overall index 7  for national info tech infrastructure was constructed giving equal weight to the Core-ITP, the teledensity index and the index of electrical consumption 8 . Therefore the IT-infrastructure index was used to represent national computing and networking infrastructure as well as  the underlying “wired” infrastructure as illustrated in Figure 1. Technological Progress (Core-ITP) (Rodriguez and Wilson 2000). This index is complex, but based on per capita availability of personal computers and the Internet. In spite of the availability of other indexes such as the Index of Technological Progress, the Broad-ITP, and the Forward Looking Core ITP, among all the indexes, the Core ITP was selected because it represented the core of the digital information and communication technologies at national level by adding the number of personal computers per capita and internet hosts per capita in a country over the last decade. So instead of constructing an index to measure national core computing and networking capacity, Wilson and Rodriguez’ Core Index of Technological Progress (Core-ITP) index was selected as proxy measure of national core computing and networking capacity. The Core-ITP ranges from 0 (Niger) to 100 (United States). Finally, selecting Wilson and Rodriguez’ Core ITP instead of constructing another index based on the same variables allows future comparisons among studies. 6  Taken from those published in the ITU database 7  The indexes were constructed ranging from 0 to 100. 8  The index was constructed from the results obtained from exploratory factor analysis using Principal Components Analysis (PCA) that identified the factors or latent variables underling each measure, and generated factors that exhibit no covariance among them. The generation of indexes based on PCA for each group of indicators is a solution to three problems: 1) the inherent multidimensionality of what we are trying to measure, i.e. info tech infrastructure, 2) the high level of collinearity (multi-collinearity) among different indicators, and 3) simultaneity. As stated before, the first problem is due to the multidimensional nature of the info tech infrastructure that is expressed by a series of indicators measuring different dimensions of the same phenomenon. PCA is based on linear transformation of the explanatory variables such that they are orthogonal to each other by design producing principal components that are an exact mathematical transformation of the raw variables. The second and third problems are especially important to solve since the different indicators of information tech infrastructure may be too correlated among themselves not allowing the use of their coefficients as explanatory variables. Varimax rotations were used for all cases.
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