How governments retard development and impede access to ICTs

Rich countries enjoy a phenomenal rate of technological progress and their wealth is now dependent on knowledge-rich technologies, including information and communication technologies (ICTs).

Because wealthy countries have highly developed ICTs, some argue that increasing access to these technologies will make poor countries wealthy.

In reality, the same barriers that prevent poor countries from becoming wealthy also prevent the poor from accessing ICTs. Attempting to correct for the so-called ‘digital divide’ by subsidising the provision of ICTs is unlikely to be successful.

The digital divide is actually part of a larger ‘dirigiste divide’ which results from the governments of poor countries imposing all manner of restrictions on entrepreneurial activity, from lack of respect for property rights to a failure to uphold the rule of law.

Without markets, underpinned by strong, transferable property rights, free trade, and the rule of law, entrepreneurs cannot make the investments that are required to expand provision of ICTs.

By contrast, where those institutions are strong, countries experience rapid growth and ICTs are made more accessible to a wider proportion of the population.

ICTs that have managed to help the poor in some way – such as mobile phones – tend to be victimised by governments through rapacious taxes, tariffs and onerous regulations, which inhibit investment and competition.

If the poor really are to join the knowledge economy, policymakers must eliminate the barriers to economic development. The rest will follow.