Charles Kenny

Questioning the Monopoly-Supported Postal USO in Developing Countries was published in M.A. Crew and P.R. Kleindorfer (eds.), Progress toward Liberalization of the Postal and Delivery Sector (Springer, 2005).  The monopoly-supported universal service obligation (USO) is usually defended on the grounds that the monopoly allows for cross-subsidy in letter services that in turn allows universal access to a service of great importance to all. This paper argues that letter delivery (as opposed to other services that may be provided by post offices) is not in universal demand in poor countries, that the size of the market in developing countries is such that USOs could not be met under the monopoly model, and that the monopoly carries heavy costs for sector development and consumer welfare. It proposes in the place of the postal USO a competitive approach involving universal access to a range of services that poor people have a need to access.

The chapter is a revised version of papers in this volume, also issued as a World Bank/AEI-Brookings working paper.  The conclusions of the paper have been challenged by economists at the Universal Postal Union.

W(h)ither the Digital Divide?, written with Carsten Fink, was published in info 5,6, in 2003. The "widening digital divide" has the status of fact in most discussions of the global distribution of information and communications technologies (ICTs), and that this divide is a problem is widely accepted. This paper challenges both assumptions. First, looking at various measures of the digital divide, there is a divide in per-capita access to ICTs but developing countries show faster rates of growth in network development than developed countries. Moreover, when employing a per-income measure of access, developing countries already "digitally leapfrog" the developed world. Second, the paper examines the prediction that disparities in absolute access to ICTs between countries will lead to reduced development prospects in poor countries. Past experience has shown that it is very difficult to make predictions of this type. The paper concludes that we may be posing the wrong policy questions when focusing on a "digital divide" as it is commonly understood.

The article was discussed in The Economist’s Economics Focus.

The Internet and Economic Growth in Less-developed Countries: A Case of Managing Expectations? was published in Oxford Development Studies 31, 1, 2003.  A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence on the limited impact of past "information revolutions" on less-developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from the opportunities that the Internet does present–they lack the physical and human capital, along with the institutions required, to exploit the e-economy. Finally, even optimistic forecasts of the Internet’s global economic impact are small in scale compared with the challenge of development. This has significant implications for development policy.

The paper was previosuly issued as a WIDER discussion paper, it will be published as a chapter in A. D’Costa (ed) The New Economy in Development (London: Palgrave).

Can Information and Communication Technologies be Pro-Poor? co-authored with Emmanuel Forestier and Jeremy Grace, published in Telecommunications Policy, 26, 11, 2002. There is over 20 years of accumulated cross-country evidence on the link between telecommunications provision and economic growth. Looking at micro-studies from a range of countries including Bangladesh, Botswana and Zimbabwe, there is also some evidence that provision of telephony has a dramatic effect on the income and quality of life of the rural poor. This paper examines cross-country evidence to discover if teledensity (the number of telephones per capita) has a pro-poor growth impact—fostering increased average incomes while reducing inequality. It also examines the impact of telecommunications rollout on quality of life variables including infant mortality and literacy. It finds that, historically, telecommunications rollout has had a positive and significant impact on increasing inequality and little impact on quality of life variables. A reason for this is tested and preliminarily confirmed that rollout has (historically) only benefited the wealthy. The paper will then turn to emerging evidence on the role of the Internet in poverty relief and statistics on the access gap in provision between rich and poor, suggesting that this new ICT will also be a force for income divergence. Using the results of the cross-country analysis on telecommunications, the paper will conclude with a discussion of potential policy responses (such as sector reform and universal access programs) to turn telecommunications from a source of growth that also increases inequality to a source of growth that diminishes it.

Should we Try to Bridge the Global Digital Divide was published in info 4,3, 2002. The standard set of statistics for measuring the "digital divide" involve per capita use of various information and communications technologies (ICTs). Underlying these statistics is an assumption that higher usage per capita would be a good thing, and ubiquitous usage would be a great thing. This article begins by examining poor people’s information needs, and noting that poor countries have to provide information infrastructure both to meet those needs and the communications requirements of business and government. The article argues that there will be a role for the Internet as part of that information infrastructure. However, features both of poor countries, and particularly of the poor people who reside in those countries, suggest that the utility of widespread Internet access may be limited. Given that providing widespread Internet access will also be complex and expensive, this suggests the goal of "closing the digital divide" by attempting to reach ubiquitous Internet use in less developed countries (LDCs) might be a costly mistake.

I summarized the article in a piece for Foreign Policy.

Information and Communication Technologies for Direct Poverty Alleviation: Costs and Benefits was published in Development Policy Review, 20, May 2002. Information and communications technologies (ICTs) are powerful tools for empowerment and income generation in developing countries. The cost-effectiveness of different ICTs does vary between developed and less developed countries, however. This article reviews the potential efficacy of radio, telephony and the Internet as tools of direct poverty alleviation in the latter. While the requirements for their successful utilisation make radio and telephone far more suitable technologies for the poor, traditional ICTs can act as a sustainable intermediary for them to gain indirect access to the power of the Internet. Governments should concentrate on opening up private and community provision of broadcasting and widening access to telephone services, so that they can effectively play this intermediary role.