ZEF Discussion Papers on Devlopment Policy 7

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ZEF Discussion Papers on Devlopment Policy 7 Pdf ko'rish
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Concluding remarks:
The evidence from the studies reviewed here suggests that there is
no guarantee that investments in ICTs will increase firm productivity. There may be a
substantial time lag between ICT investments and their effects, if any, on firm performance. The
lag also suggests that effective use of these technologies requires worker training and
organizational change and restructuring following ICT investments (see Avgerou, 1998;
Kramarz, 1998 and references therein). Additionally, rather than increasing firm productivity,
these technologies may exert their influence through product-quality improvements or through
improved services. An investigation of the links between ICTs and such indicators may provide
additional impetus for ICT investments.
4.2.2 Spreading of markets and institutional change
In the previous section, it was argued that, by reducing transaction costs, the propagation
of ICTs has the potential to enhance the spreading and development of product and factor
markets. Furthermore, it was pointed out that the spreading of markets and the reduction of
information monopolies may provide the impetus for institutional change. Anecdotal evidence
of the manner in which these technologies increase access to local and international markets,
particularly among small manufacturers, is regularly reported in the popular press. Similar
findings are reported in the academic literature. For instance, Albert Hirschmann (1967)
observed that a credit market for coffee trade developed in Ethiopia following the installation of
a long-distance telephone network. The World Development Report (1998, p.61) points out that
in rural Costa Rica and the Ivory Coast/Cote d’Ivoire, small farmers use telecommunications to
obtain information on international coffee and cocoa prices from the city. In Sri Lanka, small
farmers are able to use information acquired through the telephone to sell their crops at 80 to 90
percent of the price obtained in Colombo, substantially more than the 50 to 60 percent they were
able to achieve before the service become available. In Nairobi, a small businessman did 35
percent more business after installing phone lines. Similar instances are reported in Saunders
et
al
. (1983, p. 19), as well as by a current project that is examining the effect of cellular telephones
in Bangladesh (Bayes and von Braun, 1999).
While these findings are promising, it is important to ask whether these technologies have
a more widespread effect on market development. In other words, is there more detailed
empirical evidence that links the diffusion of these technologies to the efficiency and spread of
markets? While there is some evidence from developed countries (Garbade and Silber, 1978; Du
Boff, 1980), detailed studies that have examined the influence of ICTs on the spread and
efficiency of markets in developing countries appears to be limited.
Rather than examining the effect of these technologies on markets or some other specific
outcomes, an alternative is to examine their effects on welfare. Regardless of the manner in
which these technologies are used, the welfare effects generated by ICTs provide an idea of the
benefits associated with their diffusion.
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