What is the impact of Information Communications Technologies (ICT) and mass media on economic growth and development? This paper from the London School of Economics analyses empirical data on mass media penetration, the spread of ICT and press freedom to assess their impact on corruption, inequality and poverty. The results provide strong evidence that higher mass media penetration (newspapers, radio and TV ownership) is associated with lower corruption. Further, lower poverty is robustly associated with higher newspaper circulation.
The availability of information is crucial for efficient decision making by citizens and consumers. For the voter, information about government actions and political candidates is essential for accurate voting choices. Consumers and investors require information to purchase products and securities. Access to information is, however, circumscribed by lack of communication infrastructure.
Mass media and technological revolutions in telephony and ICT are the two main vehicles of information in modern societies. There is an increasing dependence on the knowledge-based economy for economic development and growth. There are also concerns, however, about how new communication technologies impact on the economy; in particular, how they individually impact on development and growth. Existing studies suggest that:
- The use of ICT and telephony is double edged. It can drive both economic growth and increasing spatial and individual inequalities. In India, for example, cities adopting new technologies early have developed small, scattered clusters of productivity.
- The impact of mass media is not likely to accentuate spatial or individual inequalities. Newspapers, radio and television even out asymmetries in information availability. However the quality of news generated is influenced by government treatment of the media industry.
Analysis of data compiled from the World Bank indicators data set (2004), Freedom House, Reporters Without Borders, and the International Country Risk Guide suggests the positive impact of mass media penetration and ICT/mobile telephony. While lack of appropriate data makes causality difficult to establish, there seem to be significant costs associated with having underdeveloped media and ICT sectors in developing countries.
- Both mass media and ICT penetration are associated with lower levels of corruption. This result holds across the entire sample (of both developed and developing countries).
- ICT and mass media are also associated with lower levels of economic inequality.
- However, while ICTs lead to lower inequality in the developed country sample and across the overall sample, they lead to greater inequality in the developing country sample.
