The Internet and poverty in developing countries: Welfare economics versus a functionings-based approach

Abstract

There are many reasons why the impact of the Internet on poverty in developing countries is poorly understood. Not the least of these reasons has to do with alternative modes of thinking about the issue. In this paper, we examine the theories of consumption underlying two important evaluative frameworks, namely, traditional welfare economics on the one hand and Sen's notion of functionings on the other. Using a number of actual examples, we find that in at least two major respects, the former approach is far too limiting and needs to be replaced by the latter (which, in particular, focuses on the actual use that is made of the Internet and embraces, rather than excludes, disciplines other than economics). The functionings approach has a close affinity with ethnographic research, which, as we tried to show, reveals much about the less visible impact of the Internet on poverty. q

Poverty reduction in rural China: Does the digital finance matter?

“…As before, we further test whether these two mechanisms could reduce absolute and relative poverty among rural households, and the results are shown in Table 7 . It is clear that all estimated coefficients on Information attention and Mobile payment are significantly negative, which remains consistent with some literature [ 81 , 82 ]. These findings provide a preliminary indication for the reliability of hypothesis 2, that the information advantage from digital finance helps to alleviate rural household poverty.…”

Understanding benefits realisation of iREACH from a capability approach perspective

“…There is a reasonable volume of work linking ICT and the CA in some way (e.g. Alampay 2006a, b;Barja and Gigler 2005;Byrne and Sahay 2007;De' 2007;Garai and Shadrach 2006;Garnham 1999;Gigler 2004Gigler , 2008James 2006;Kleine 2010;Macueve 2008;Madon 2004;Mansell 2006;Musa 2006;Olatokun 2009;Oosterlaken 2009;Thomas and Parayil 2008;Walsham and Sahay 2006;Wresch 2009;Zheng and Walsham 2008). A common thread in much of this literature is the attention given to the capabilities of users to benefit from the technology in ways that will achieve desired functionings.…”

“…As discussed in the research findings, there were some similarities in outcomes between iREACH and Akshaya, particularly in providing physical spaces for women. Also interested in functionings, James (2006) explored the relationships between the Internet and poverty, concentrating on what occurs after the 'point of purchase', i.e. usage, contrasting this with traditional welfare economics, with its emphasis on access, without consideration to the use of goods and service acquired.…”

Bridging the Social and Digital Divides in Andhra Pradesh and Kerala: A Capabilities Approach

“…In a volume edited by Mansell and Wehn (1998), it was pointed out that the capabilities for producing software and information content that are relevant to people, and the capabilities required for converting information into useful knowledge, are equally important for realizing the opportunities promised by ICTs. As James (2006) argues, the specific context of the users of the Internet is the key to understanding the differential impact of ICTs on rural poverty.…”

“…1 1 See discussions on Sen's capability approach in Gasper (1997), Martins (2006) and Robeyns (2000). It came to our attention just before this article went to press that Sen's functionings‐based approach as an evaluative framework to explain the impact of the Internet on poverty in developing countries was also used by James (2006). James's findings, based on secondary sources of evidence of the differential benefits of the Internet on rural poor in Mozambique (foreign‐aid tele‐centres) and Sri Lanka (blending radio with the Internet), is similar to the evidence we have gathered in our field research in Kerala and Andhra Pradesh.…”