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Communication Technology and Economic Growth

The next AoIR 2011 session starts with Alex Farivar, whose interest is in mobile phone diffusion; such diffusion has also been an important driver of economic development and democratisation in a number of countries, it has been claimed. Alex’s project examined some 122 countries for the years 1946 through to 2009, studying economic growth patterns and examining (in more recent years) the role of Internet and mobile diffusion. Similarities in economic positioning, geographic context, and other factors were also considered.

Does mobile and Internet diffusion predict economic growth; does socioeconomic instability or democratic instability hinder such growth? Variables here included world system positioning (core, semi-peripheral, peripheral), income, democratic development, mobile and Internet diffusion, sociopolitical instability, urbanisation, population, and time and region.

There has been substantial growth in income, mobile and Internet diffusion (mobile more so than Internet), and significant change in areas of polity and (economic?) stress (and these data do no include the effects of the current global financial crisis yet).

For all countries, mobile and Internet diffusion will predict economic growth; sociopolitical instability will affect economic growth negatively, but not very strongly; democratic development is not directly related to economic growth, but to sociopolitical instability (in peripheral countries, democracy was negatively related to economic growth, actually).

This means that some of the economic development thesis is not supported by these findings; more democracy does not necessarily lead to more wealth, but sometimes also to more instability. Economic development and democratic augmentation remain discrete processes; aspects of democratic governance that facilitate technology may also stifle economic growth processes. Much of this needs to be evaluated anew in the context of the current changes from the Arab Spring to the global financial crisis, of course.