Information and Communication Technologies, Markets and Economic Development

This chapter identifies the economic underpinnings of the argument for a significant role for ICTs in the development process and the basic premise is that information and communication are valuable commodities that can enhance the functioning of markets critical for the well-being of the poor.

Abstract

There is great optimism over the potential forinformation and communication technolo-gies (ICTs) to promote economic development and alleviate poverty. Currently, however, there is neither a solid theoretical basis nor convincing empirical evidence to support such optimism. This chapter identifies the economic underpinnings of the argu-ment for a significant role for ICTs in the development process. The basic premise is that information and communication are valuable commodities that can enhance the functioning of markets critical for the well-being of the poor. Recent advances in ICTs can bring these benefits to even the poorest of the poor in the developing world. This chapter is organized as follows. We begin with a theoret-ical discussion of markets and economic efficiency, highlighting the desirable outcomes that result from well-functioning