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Open Economies - Is the Internet a Silver Bullet? [Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Is the Internet a Silver Bullet?
Hello, My background is in Computer Science, Economics and Mathematics (University of Toronto). Hopefully, that will explain where I am coming from: Why is there so much poverty in the world? Shouldn't the Invisible Hands envisioned by Adam Smith make everything equal? No! In reality, we have to deal with imperfect economics - imperfections created by policies (e.g. protection of domestic markets for textile by most developed countries) or circumstances (e.g. cost of pollution is not totally borne by the creator). Imperfections are very often connected with Informational Asymmetries. This is where the Internet comes in! Consider your personal usage of the Internet. Notice how (almost?) everything we do on the net can come under the category of "Gathering Information". The reason we spend resources acquiring information is that we believe it is a good investment (you have to pay for the internet up front). How much money do you save comparing the prices of plane tickets, cameras, etc. on the web? Another great use is to find jobs or finding out how much you "could" be making. The list goes on and on. Unfortunately, A LOT of the information on the Internet is useless. Also, the set of useful information is extremely huge too. Finally, one man's useless information is another man's insightful newsgroup posting :-) At the least, this suggests a front where policy may be highly effective. If Government organizations and NGO's organize information into manageable chunks, they may see significant dividends. This is just one piece of the puzzle. Another piece relates to the "good investment" I mentioned earlier. Information is one of those weird commodities where you can't determine its true value until (or even after) you consume it. A policy of initially introducing Internet Access for free or at a subsidized rate may be an effective one. Finally, I'll talk about applications. I can very easily think of Afghan rugs being sold on E-Bay. If someone could organize a decent logistical infrastructure (e.g. shipping, payment, etc.), this might turn into a huge industry. The products of many other cottage industries would be perfectly suitable as well. An NGO could step up to the plate to help out with the organization. The Internet isn't a silver bullet for the problem of poverty. However, it has the potential to become powerful ammo for policy makers world-wide. Thanks, Iqbal Mohomed www.mohomed.com
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