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OVERVIEW
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Box O.6 Nailing Jell-O to the wall—restrictions on the flow of
information (continued)
websites may be considered a nontariff trade barrier. Local
companies will fill the gap. This could be considered an
economic benefit or transfer rather than a cost. But it prevents
domestic users’ access to possibly better products,
and domestic champions will not face as much innovationinducing
competition. Fifth, widespread censorship means
that people avoid discussing and exchanging ideas openly,
a prerequisite for an innovative and productive society.
Sources: WDR 2016 team, based on Saleh 2012; King, Pan, and Roberts 2013; Bao 2013; HRW 2015.
a. Elmer-Dewitt 1993.
b. Clinton 2000.
Box O.7 Is the internet a public good?
The internet does not have all of the characteristics of a
pure public good. Access to the internet often requires a
fee, so individuals can be effectively excluded from its use.
But once on the internet, the consumption of information
by one user does not reduce its availability to others, so in
that sense it is nonrivalrous (although capacity constraints
can slow down access). One way to describe the internet is
as a club good that is excludable but nonrivalrous, similar
to cable television; or if bandwidth is scarce, as a private
good with strong positive externalities—everyone benefits
as more people come online. As more essential services
and information migrate to the web, anyone without access
almost becomes a second-class citizen. And all citizens
benefit when everyone else is better informed and when
public services are provided electronically at lower cost.
The private sector should take the lead in providing
internet infrastructure and services because the business
case is usually compelling. But public investment or intervention
is sometimes justified where the private sector is
unable to provide affordable access. Historical precedents
include the United States Communications Act of 1934,
which called for universal “wire and radio communication
service,” even in remote rural areas. Some countries have
gone further. Finland, for example, has defined access to
the internet at broadband speeds as a legal right and pursues
a universal access policy.
Source: WDR 2016 team.
Box O.8 The four digital enablers
The WDR 2016 looks at how the internet increases productivity
of businesses, opportunities for people, and the effectiveness
of governments. Across these domains, four major
enablers of digital development are critical. Four spotlights
in the Report discuss their benefits and potential risks.
Digital finance. Banks have been early and eager adopters
of digital technologies, but many of the major innovations,
such as online payments, mobile money, and digital currencies,
have come from nonbank institutions, including
telecom and internet companies. Some of these innovations
took root first in developing countries, where they overcame
shortcomings in traditional financial systems. Their
benefits are distributed widely. Secure online payments fuel
e-commerce. Electronic transfers reduce the cost of sending
remittances. Peer-to-peer lending can vastly improve the
financial access of startups. Governments can make payments
and social transfers at lower cost and with less fraud
and leakage. However, if financial regulations don’t keep
pace with the rapid technological progress, these innovations
could risk affecting the stability of the overall system.
Social media. Social networks are fundamental to human
society, and digital technologies have accelerated their
formation. More than one-fifth of the world’s population is
now believed to be a member of one or more social media
platforms. These platforms have been credited with facilitating
economically beneficial interactions, channeling users’
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