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Regulation and Internet Use in Developing Countries

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  • Wallsten, Scott
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    Abstract

    Concerns about a worsening "digital divide" between rich and poor countries parallel the hope that information and computing technologies (ICTs) could increase economic growth in developing countries. Little research, however, has explored ICT growth beyond noting that it is correlated with standard development indicators, and no empirical research has explored the role of regulation. In this paper, Scott Wallsten uses data from a unique new survey of telecommunications regulators and other sources to measure the effects of regulation on Internet development. Controlling for factors such as income, telecommunications infrastructure development, ubiquity of personal computers, and time trends,Mr.Wallstenfinds that countries requiring formal regulatory approval for Internet Service Providers (ISPs) to operate have fewer Internet users and hosts than countries that do not require such approval. Moreover, countries that regulate ISP final-user prices have higher Internet access prices than countries without such regulations. These results suggest that developing countries' own regulatory policies can have large impacts on the digital divide.

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    Bibliographic Info

    Paper provided by Regulation2point0 in its series Working paper with number 343.

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    Date of creation: May 2003
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    Handle: RePEc:reg:wpaper:343

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    Web page: http://regulation2point0.org/

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    1. Noll, Roger G., 1999. "Telecommunications Reform in Developing Countries," Working paper 527, Regulation2point0.
    2. Pohjola, Matti, 2002. "New Economy in Growth and Development," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    3. Suma S. Athreye, 2005. "The Indian software industry and its evolving service capability," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 393-418, June.
    4. Dasgupta, Susmita & Lall, Somik & Wheeler, David, 2001. "Policy reform, economic growth, and the digital divide - an econometric analysis," Policy Research Working Paper Series 2567, The World Bank.
    5. Clarke, George R.G., 2001. "Bridging the digital divide - how enterprise ownership and foreign competition affect Internet access in Eastern Europe and Central Asia," Policy Research Working Paper Series 2629, The World Bank.
    6. Kenny, Charles, 2002. "The Internet and Economic Growth in Least Developed Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    7. Clarke, George R.G., 2002. "Does Internet Connectivity Affect Export Performance? Evidence from Transition Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:
    1. M'HENNI, Hatem, 2004. "La fracture numérique Nord-Sud de la méditerranée; une explication néo-institutionnelle
      [A digital divide between north and south of Mediterranean sea: A neo-institutional explanation]
      ," MPRA Paper 27548, University Library of Munich, Germany.
    2. Shchetinin, Oleg & Baptiste, Massenot, 2008. "How to Overcome the Digital Divide? The Determinants of Internet Diffusion," MPRA Paper 9413, University Library of Munich, Germany.
    3. Andrea Bonaccorsi & Lucia Piscitello & Cristina Rossi, 2005. "Explaining The Territorial Adoption Of New Technologies - A Spatial Econometric Approach," ERSA conference papers ersa05p92, European Regional Science Association.
    4. Clarke, George R.G. & Wallsten, Scott J., 2004. "Has the internet increased trade? Evidence from industrial and developing countries," Policy Research Working Paper Series 3215, The World Bank.
    5. Clarke, George R.G., 2005. "Beyond tariffs and quotas : why don't African manufacturers export more?," Policy Research Working Paper Series 3617, The World Bank.
    6. Yartey, Charles Amo, 2008. "Financial development, the structure of capital markets, and the global digital divide," Information Economics and Policy, Elsevier, vol. 20(2), pages 208-227, June.
    7. Charles Amo Yartey, 2006. "Financial Development, the Structure of Capital Markets, and the Global Digital Divide," IMF Working Papers 06/258, International Monetary Fund.

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