Cyclopedia Of Economics 1st edition

Technology (and Development)

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Technology (and Development)

In many countries in transition cellular phones are more ubiquitous than the fixed-line kind. Teledensity is vanishingly low throughout swathes of Central and Eastern Europe (CEE). Broadband and e-commerce are distant rumors (ISDN is available in theory but not so in practice - DSL and ADSL are not available at all). Rare phone lines - especially in urban centers - are still being multiplexed and shared by 4-8 subscribers, greatly reducing both quality and usability. Terrestrial television competes ferociously with satellite TV, though cable penetration is low. Internet access is prohibitively expensive and intermittent. Many technologies rely on network effects (i.e., a critical mass of users). CEE is far from reaching this elusive point.

When communism imploded in 1989, pundits were quick to spot the silver lining. The countries in transition, they said, could now leapfrog whole stages of development by adopting novel technologies and through them the expensive Western research they embody. The East can learn from the West's mistakes and, by avoiding them, achieve a competitive edge.

In his seminal book, "Leapfrogging Development - The Political Economy of Telecommunications Restructuring", J.P. Singh, examined the acceleration of development through the adoption of ready-made, off the shelf, technologies. His melancholy conclusion was that development preferences are the outcomes of an intricate inter-play between sectoral pressure groups and coalitions of interest groups - and not the result of progress ex machina. He distinguished three types of states - catalytic, near-catalytic, and dysfunctional. Though he deals exclusively with Asia and Latin America, his typology is applicable to post-Communist Europe.

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