The overall policy environment, the degree of transparency and inclusion, and, more specifically, the regulatory environment, can all have a major impact on the development dynamic.55 In addition, key policies in each of the areas of strategic action—human capacity, infrastructure, enterprise—as well as policies supportive of fair competition and property rights, are important to harnessing the potential of ICT to achieve development goals.
Transparency and Inclusion. Transparent and inclusive government processes are useful for both the expansion of ICT, and also an area that the use of ICT can facilitate. For example, the Internet can be used to ensure access to legislation, taxation codes and government services, and thereby facilitate consumer and citizen input into governance processes.
Regulatory Framework. If the regulatory framework is not sufficiently adaptable, it can slow the development of competition in the sector and expansion of ICT use and enterprise growth. There is evidence to indicate that deregulation has had a positive influence on the development of infrastructure56 in almost all the developing countries where it has been attempted. The benefits of competitive privatization come not only in the form of improved infrastructure, but also through increased foreign investment: in Brazil, for every dollar raised through privatization, an additional US$2.42 are attracted through FDI.57, 58
Liberalization and creation of a competitive environment in ISP markets, in many instances, resulted in rapid market expansion.59 At the same time, regulatory actions that restricted competition significantly inhibited the growth of Internet services.60
Liberalization can also have side effects on developing country government budgets. Many developing countries depend upon interconnection and telecommunication charges to finance social welfare expenditures. Reductions in government collections resulting from liberalization may lead to a need for transitional mechanisms so that social programs are not adversely impacted.
Institutional Capacity. For an ICT as enabler strategy and synergies among the components to be achieved, a basic level of institutional capacity is required. For example, the benefits of a good regulatory framework can be undercut if regulators lack the training, resources, or motivation to implement it.
Even though policy formulation is typically the responsibility of national governments, other stakeholders assist through the sharing of good practices and expertise. Increasingly, the development of institutional capacity and related expertise can be facilitated by leveraging external policy support—for example, regulator-to-regulator programs, virtual policy centers and foreign expertise.
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Nations Development Programme.
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