On Cell Phones and Development

This satirical Onion story about a guy who finally caves in and buys a cell phone reminded me of an article I saw in The Economist last month.

For all of the talk about PCs and the digital divide, mobile phones, the piece says, are crucial for economic development in the poorest parts of the world:

Mobile phones have become indispensable in the rich world. But they are even more useful in the developing world, where the availability of other forms of communication—roads, postal systems or fixed-line phones—is often limited. Phones let fishermen and farmers check prices in different markets before selling produce, make it easier for people to find work, allow quick and easy transfers of funds and boost entrepreneurship. Phones can be shared by a village. Pre-paid calling plans reduce the need for a bank account or credit check. A recent study by London Business School found that, in a typical developing country, a rise of ten mobile phones per 100 people boosts GDP growth by 0.6 percentage points. Mobile phones are, in short, a classic example of technology that helps people help themselves.

The main stumbling blocks: 1) the steep prices of handsets, and 2) taxes on phones and services.

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