Technology and Development

Menna Bishop, Robin Burgess, Céline Zipfel

1 Introduction

Two major challenges face humanity in the coming century. The first is to
generate the innovations and productivity improvements that will keep people on a
path to higher standards of living. The second is to ensure that expanding human
activity does not generate negative environmental externalities that block this path
to progress.1 In short, our future is about balancing the need for growth with the
externalities that arise from that growth.

How both these challenges play out will be determined in large part by what
happens in developing countries. It is here that the need to banish poverty is greatest.
Indeed, 196 countries have signed up to the goal of eliminating extreme poverty by
2030. It is also in developing countries that environmental externalities from growth
are increasing at the most rapid rate and where populations stand to be most
affected.

1
Both these challenges are enshrined in the sustainable development goals (SDGs): SDG1
– “End poverty in all its forms everywhere”; SDG2 – “End hunger, achieve food security and
improved nutrition, and promote sustainable agriculture”; SDG3 – “Ensure healthy lives and
promote well-being for all at all ages”; SDG4 - "Ensure inclusive and equitable quality
education and promote lifelong learning opportunities for all”; SDG6 - "Ensure availability
and sustainable management of water and sanitation for all”; SDG7 - “Ensure access to
affordable, reliable, sustainable and modern energy for all”; SDG8 - “Promote sustained,
inclusive and sustainable economic growth, full and productive employment and decent work
for all”, SDG9 – “Build resilient infrastructure, promote inclusive and sustainable
industrialization, and foster innovation”; SDG12 - “Ensure sustainable consumption and
production patterns”; SDG13 -“Take urgent action to combat climate change and its
impacts”; SDG14 – “Conserve and sustainably use the oceans, seas and marine resources for
sustainable development”.

Menna Bishop,
London School of Economics
London, UK

Robin Burgess,
International Growth Center
London School of Economics
London, UK
r.burgess@lse.ac.uk

Céline Zipfel
London School of Economics
London, UK
2

These challenges are both complex and multifaceted and so require not just the
development of new innovations but also their careful adaption to developing
country contexts. Ensuring that new technologies work when deployed at scale in
this way will require the coming together of engineers, technologists, economists
and policy makers. It is this collaborative approach to addressing development
challenges which is at the core of development engineering.

This chapter provides an overview of some of the research areas where

technology and development can be brought together in a fruitful manner. As with
any nascent field, this is a preliminary and incomplete set of topics which is intended
to foster and encourage further research in this exciting and important area of work.

We begin with the role of technology in shaping productivity and economic

growth. A focus on productivity and growth is inescapable when one is considering
poor populations and poor countries. This makes it natural for us to devote
considerable attention to the role of technology in the production side of the
economy. Hence, we consider how technological innovations can make firms in
agriculture, manufacturing and services more productive. Here, it will be made clear
that information and communication technologies (ICTs) such as mobile phones
have a critical role to play. The chapter also examines how trade can be made to
flow more freely, both internally within countries and externally between countries,
and the development benefits that follow from this. Furthermore, we explore how
investments in communication and transportation infrastructures can improve the
functioning of markets and accelerate structural change, the movement of people
from less productive to more productive jobs.

Structural change is ultimately what drives poverty downwards as workers

become more productive.2 For most poor people in the world, labor is their only
asset. This means that much of development is about getting people into better jobs,
with people’s incomes largely being determined by the returns on their labor. We
therefore consider how technology can be harnessed in this vital process, both in
improving the efficiency of job search and matching but also in expanding the size
of the markets within which people can sell their labor. We also comment on how
the automation of labor market activities brings both challenges and opportunities
as the nature of work changes across the world. Finally, this section will summarize
evidence on how technology can be used in schools to widen access to quality
education.

Also central to production, particularly for populations with little capital, is

access to financial technologies such as mobile money. These are beginning to
transform the landscape of financial services in the developing world by bringing

Structural change in the economy is a process involving the movement of people

2

from less productive jobs (e.g. subsistence agriculture) to more productive jobs.
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the ability to borrow and save to populations who have traditionally been excluded
from formal financial institutions, thus allowing them to fund new productive
activities. These financial technologies may also expedite the movement of money
and make households more resilient when hit with different types of shocks. Finally,
digital payment technologies are increasingly being used by governments and firms
to reduce leakages in payment systems, whether this be payments for workers or
welfare transfers to poor populations. Together, these can bring improvements in
efficiency and changes in household financial behavior that stand to have long-run
implications for development.

It is clear that different inputs are needed for people and firms to take on the
modern production activities that drive structural change. One key input is
electricity. Our chapter will outline how innovations in renewables such as solar are
being combined with technological improvements in national grids to universalize
access to electricity. This is revolutionizing the choice of electricity source for firms
and households across the developing world, many of whom have been entirely
without access to electricity until now. Given that the bulk of greenhouse gas
emissions come from the combustion of fossil fuels, one major issue that needs to
be confronted in the energy space is how electricity is generated and how the
associated environmental externalities are reflected in policies and pricing. Equally
critical is the removal of electricity theft and subsidies which are often regressive
but are endemic to public utilities in several developing countries. Improvements in
generation technologies, energy efficiency and technologies for monitoring
consumption can all be harnessed to ensure that rapid growth in electricity demand
in developing countries will be met in a manner that is as sustainable as possible.

This concern with sustainability extends beyond the issue of energy generation
and is discussed throughout the chapter. Both growth and the externalities from
growth are now deemed central to the study of development economics, which was
not the case a decade ago. As such, we will consider how human activity will affect
the environment and how technology can be used to minimize the negative
environmental externalities that emanate from this activity in a range of different
areas, including agriculture and transport. This will involve considering what type
of growth is occurring, including the kinds of firms involved and the types of work
people engage in, but also how technology can be harnessed to counter processes
like climate change.

Strong state capacity is required to steer a path towards sustainable growth and
development. Here, there is increasing recognition that technology can play an
important role, both in the form of platforms that promote political engagement and
in applications that serve to increase the accessibility, monitoring and integrity of
elections. Together, these serve to improve the accountability of governments to
citizens and help close the gap between the design of policy and its implementation
that often exists in developing countries. Closing this gap can lead to improvements
4

in the functioning of the state for example in ensuring that populations have access
to a higher quality of public services.

In the final part of the chapter, we consider how technology can play a role in
development by shaping access to healthcare. Exciting new work is documenting
how, in doing so, technology can help to bridge the gap in health between
developing and developed countries. This also loops back into what types of work
people can do, the returns to their labor and how well firms function.

The complexity of the development challenges that humanity is facing in each

of these areas demands that technological innovations and ideas be brought to bear
on them. This is what makes the study of development engineering so important. It
is really about bringing in frontier thinking from technology into development, to
guide interventions and policy decisions. Only in doing so will we have a chance at
achieving the difficult balance between ending extreme poverty by 2030 and doing
so in a way that does not block the path of prosperity for future generations.

2. Firms, Trade and Infrastructure

The relationship between technology and productivity is one at the core of many
economic models, with theories that stress the importance of technological
innovations for sustained growth making up a significant share of the growth
economics literature (e.g. Solow, 1957; Aghion & Howitt, 1992; Romer, 1990). In
this section, we review the existing literature on two channels linking technology to
development, an area of research that remains comparatively small. First,
technology can improve productivity in firms and agriculture. Second, technology
can facilitate trade, enhancing the integration of markets both within and across
countries (Donaldson, 2015). These in turn have the propensity to accelerate the
structural change process which underpins economic development.

2.1 Boosting productivity in firms and agriculture

2.1.1 Agriculture

To date, agricultural productivity remains relatively low in the world’s poorest

regions, with subsistence farming still the most widespread occupation in many
developing countries (Lowder et al, 2016). An important body of research in
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development economics has been dedicated to understanding the role technology

can play in rectifying these vast disparities in productivity across countries. This
may take the form of agricultural biotechnologies, including improved seeds and
fertilizers promising higher yields, or ICTs used to receive and share agriculture-
relevant information. The hope is that resulting shifts in productivity can eventually
enable developing countries to jumpstart their structural change processes,
facilitating the flow of labor from agriculture into the manufacturing and service
sectors.

The adoption of agricultural biotechnologies such as improved fertilizers and

seeds has been a hallmark of production in many developed countries, given their
proven impact on yields and cost (Brookes & Barfoot, 2018). Many have studied
how these benefits have been extended to developing countries, who in 2018
accounted for 54 percent of global biotech crop area (ISAA, 2018). For example, in
a study in Kenya, Duflo et al (2008) estimated annualized rates of return of 70
percent to the use of chemical fertilizer. Similarly, Bustos et al (2016) study the
introduction of genetically engineered soybean seeds in Brazil and its positive
impact on agricultural productivity. They show that such technologies can in turn
trigger industrial growth, releasing labor from agriculture and allowing it to shift
towards industry and services.

ICTs represent another avenue for boosting agricultural productivity in

developing countries. This encompasses use of mobile phones, internet, television
and radio to receive and share information on prices, weather and farming
techniques, both within private networks and as part of government initiatives. By
improving information circulation and connectivity, ICTs stand to help farmers
optimize production decisions. Rosenzweig et al (2019) shed further light on this in
their study of weather forecasts in India. They argue that accurate forecasts increase
profits by allowing farmers to allocate resources to exploit rainfall conditions. For
example, in areas where forecasts are accurate, they show that a pessimistic forecast
lowers planting-stage investment and use of rainfall-sensitive crops. In settings such
as India (Jensen, 2007) and Niger (Aker, 2010), use of mobile phones for sharing
price information was furthermore shown to promote arbitrage in fish and grain
markets.

ICTs can also reduce the cost of agricultural extension services, particularly in
low population density regions. Fabregas et al (2019) discuss how this may be vital
for increasing exposure to science-based agriculture advice. They furthermore note
that GPS-enabled devices may facilitate the tailoring of information, for example
notifying farmers of local pest outbreaks, as well as two-way communication, where
farmers are able to ask specific questions. Digital Green is one development
organization harnessing ICTs in this way. It connects farmers with experts and
disseminates information via video, and in India was shown to increase adoption of
certain practices seven-fold relative to traditional training and visit-based extension
6

approaches and to be ten times more effective per dollar spent (Ghandi et al, 2009).
Overall, in sub-Saharan Africa and India, meta-analyses indicate that information
transmission via mobiles has increased yields by 4 percent and the likelihood of
adopting recommended agrochemical inputs by as much as 22 percent (Fabregas et
al, 2019).

Despite significant enthusiasm for biotech crops, development initiatives have

sometimes been confronted with poor adoption rates, presenting an important
puzzle for economists and policymakers. Where returns have proven heterogeneous
across farmers, this may simply reflect optimal decision-making. For example, in
rural Kenya, Suri (2011) showed that at least some farmers are better off not
adopting technologies such as hybrid maze. In other settings, however, returns to a
technology have been shown to significantly exceed the cost of the investment,
implying other constraints might be at play (Duflo et al, 2011).

Here, one important strand of the literature has emphasized the role of market
inefficiencies, including poor infrastructure, insecure land rights and missing
markets, particularly in the area of financial services (Jack, 2011). For example,
where agriculture is rain-fed and farmers lack access to formal insurance, incentives
to invest in inputs and technologies may be diminished. This has been tested
experimentally in Ghana by Karlan et al (2012), who find that when provided with
insurance against the primary risks they face, farmers could find the resources to
increase expenditures on their farms. Similarly, even where the benefits of ICTs are
well known, farmers may be unable to access or act on information due to lack of
telecommunications, electricity and transportation infrastructure or illiteracy.

Behavioral factors can also inhibit the diffusion of agricultural technologies. In

the case of ICTs, for example, information disseminated via these interfaces may
not be afforded the same level of trust as that shared via social networks and
traditional extension services. Here, some have pointed to the role of social learning
and network effects in the diffusion of agricultural technologies. Studies such as
Foster and Rosenzweig (1995), Conley and Udry (2010), Bandiera and Rasul
(2006), and Duflo et al (2010) suggest that their adoption might pose less of a risk
for poor farmers when the cost of experimentation is shared with others.

Interlinked with the desire to increase agricultural efficiency are sustainability

concerns. It has been estimated that the global population will reach 9 billion by
2050, which will demand a 60 percent increase in agricultural production (Nikos &
Jelle, 2012). However, this intensification risks accelerating climate change through
its contribution to greenhouse gas emissions and resource degradation. Moreover,
our ability to meet growing global demand is in itself threatened by climate change
and the damaging impact of changing weather patterns on yields, increasing the risk
of food insecurity in developing regions (Ignaciuk & Mason-D'Croz, 2014). As
such, it is imperative that agricultural technologies enable farmers’ adaptation to a
 7

changing climate while minimizing any further environmental degradation.

Evidence suggests that biotechnologies have contributed significantly to
agriculture’s sustainability, for example by reducing the need for pesticide spray
and facilitating cuts in fuel use and tillage changes (Brookes & Barfoot, 2018).
There has also been much enthusiasm surrounding conservation agriculture (CA)
practices. Centered on diversified crop rotation, minimum soil tillage and
maintenance of permanent soil cover, these intend to prevent soil erosion and
degradation and enhance biodiversity whilst improving yields (FAO, 2001).

One notable application of CA is the Kenya Cereal Enhancement Program -

Climate Resilience Agricultural Livelihoods Window (KCEP-CRALW), co-funded
by the European Union and the International Fund for Agricultural Development
(IFAD). This provides smallholders with access to training, improved inputs and
CA services through an electronic voucher system, hoping to reduce poverty and
promote food security in Kenya’s vast arid lands (IFAD, 2015). IFAD reports that
the initiative has already reached 83,000 famers and is currently being scaled up
throughout Kenya (IFAD, 2020). However, evidence regarding the success of CA
in practice has been mixed. For example, in a study of rural Zimbabwe, Michler et
al (2019) find that CA produces no yield gains and sometimes yield losses in years
of average rainfall, but does mitigate the negative impacts of deviations in rainfall.
Other studies have shown that yield gains are heavily context-dependent and may
only be observable after several years (Stevenson et al, 2014). Ultimately, rigorous
evidence on the effectiveness of these technologies and the potential trade-offs
involved in their uptake remains limited, as are adoption rates. As such, this must
be an important focus for research in coming years.

Overall, much remains unknown as to the constraints to technology adoption in

agriculture. However, evidence seems to suggest that solutions might lie in
packaged interventions that relax multiple constraints simultaneously, for example
making complementary infrastructure investments. Moreover, while adoption of
biotech crops has reached over 90 percent in countries such as Brazil, Argentina
and India, other regions have been lagging behind (ISAAA, 2018). This links to
persisting political opposition to genetically modified crops in certain regions,
which must be met with dialogue between plant scientists, economists and policy
makers across countries (Elliott & Keller, 2016). Simultaneously, research must
continue to seek paths to achieve sustainable intensification of our agricultural
production.

2.1.1 Firms

Another fundamental link between technology and development relates to its

ability to improve the productivity of firms in manufacturing and services.
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Neoclassical economic theory has long accepted technological change as the sole
driver of long-term growth since the seminal work of Solow (1957). This prompted
a vast body of research aimed at understanding the drivers of productivity
(Syverson, 2011; Bloom & Van Reenen, 2010) and testing the impact of
technological innovations.

In the context of developed countries, various studies have documented a

positive impact of new technologies on industry-wide productivity. One notable
example is the minimill’s introduction to the US steel manufacturing sector, to
which Collard-Wexler and De Loecker (2015) attribute a significant increase in
productivity in the second half of the 20th century. Here, they identify a reallocation
of output among incumbents, where the least productive firms that failed to adopt
the new technology were driven out of the industry. Other evidence has robustly
linked the 1990s acceleration in US productivity to the development of ICTs.3 For
example, focusing on the valve manufacturing industry, Bartel et al (2007) find that
new IT investments improved the efficiency of all stages of the production process
and increased the skill requirements of machine operators.

There also exists a small but growing literature on technology’s role in firm and
sector productivity in the developing world. Exploiting firm-level survey data,
Commander et al (2011) find evidence of a large, positive productivity effect of ICT
adoption in both Brazil and India. In Brazil, this effect was largest for firms
simultaneously investing in flattening organizational structures, and in India, in
areas with better infrastructure. Moreover, ICT capital intensity was negatively
correlated with poor infrastructure and pro-worker labor regulation. A more recent
study by Atkin et al (2017a) investigates the introduction of a new cutting
technology in Pakistan’s soccer-ball industry. While this was found to reduce waste
and increase technical efficiency for nearly all firms in the sector, adoption rates
were low when the technology was offered free-of-charge to a random subset of
these. The authors attribute this to misaligned incentives in piece-rate contracts,
where employees were initially slowed by the new technology and faced no private
incentive to reduce waste, resulting in resistance to adoption. Indeed, when
employees were offered financial incentives conditional on demonstrating
competence in using the technology, adoption increased significantly.

Ultimately, the literature on technology’s impact on firm productivity in

developing countries remains in its nascent stages. However, the examples above
provide an important cautionary tale for policymakers – though new technologies
can be highly effective at raising productivity in firms, we must not lose sight of the

See Draca, Sadun and Van Reenen (2007) for a review of the literature on ICTs
3

and firm productivity

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conditions that encourage adoption and high returns. This should involve
consideration of infrastructure investments and the regulatory environment.

2.2 Facilitating Trade

Firms and households in developing countries face relatively restricted access to

markets. Whether a result of policy barriers (e.g. regulations) or poor transportation
infrastructure, this prevents firms from engaging in trade and inhibits the transfer of
technology. This also stops households from accessing cheaper goods and seeking
more productive work opportunities which are key drivers of growth and
development. As such, many experts have argued for measures to facilitate trade,
such as investments in transportation infrastructure. Use of ICTs can also help to
overcome transport costs and facilitate arbitrage, improving market efficiency and
firm performance and reducing waste.

A small but growing empirical literature emphasizes the positive welfare effects
of trade for both producers and consumers in developing countries. For example,
Atkin et al (2017b) randomize access to export markets for small carpet-making
firms in Egypt. They find evidence of “learning-by-exporting”, where exporting
firms witnessed improvements in technical efficiency, resulting in higher output
quality and profits. On the consumer side, Atkin et al (2018) study retail FDI
(foreign supermarkets’ entry into the local retail sector) in Mexico. They detect
large welfare gains for the average household, primarily driven by lower living
costs. Finally, Redding and Sturm (2008) offer rigorous evidence on the importance
of market access for economic development using Germany’s division and
reunification as a natural experiment.

One important factor that inhibits trade and its associated welfare benefits is high
transportation costs. In recent years, a number of studies have demonstrated how
combatting this via infrastructure investments can accelerate economic
development. For example, railroads - a major technological advance of the 19th
century - were shown to facilitate internal trade and market access and produce
lasting growth and welfare effects in settings such as colonial India (Donaldson,
2018) and 19th century US (Donaldson & Hornbeck, 2016). Similarly, focusing on
fifteen countries in sub-Saharan Africa who have a port as their largest city,
Storeygard (2016) finds that incomes in secondary cities are highly sensitive to the
cost of transport to the largest city.

By reducing transport costs, transportation infrastructure investments also allow

households to access external work opportunities, which may improve the
allocation of human capital. For example, Morten and Olivera (2020) study the road
networks connecting Brasilia and Brazil’s state capitals. These are shown to have
10

decreased both trade and migration costs, resulting in important welfare gains.
Adukia et al (2020) focus instead on transport networks to rural areas in their study
of India’s $40 billion program to construct all-weather roads to nearly 200,000
villages. They detect a positive impact on adolescent schooling outcomes,
particularly in areas where the relative return to high-skill work increased the most.
This is consistent with market access having increased the return to human capital
investment, suggesting the potential for long-run gains to infrastructure
investments. In a later study of the same intervention, Asher and Novosad (2020)
detect a large reallocation of workers out of agriculture. This is reinforced by a
model developed by Gollin and Rogerson (2014) in which reducing transportation
costs generates agricultural productivity gains, in turn decreasing the fraction of
people working in subsistence farming.

On the other hand, another strand of the literature has cautioned that gains from
infrastructure and trade may be unevenly distributed. This may be the case where
certain regions are disadvantaged in ways that prevent them from realizing the
benefits of improved market access, and instead are confronted with issues such as
capital flight. Faber (2014) explores this question in his study of China’s National
Trunk Highway system, as a by-product of which many peripheral counties were
connected to major production centers. He argues that declining trade costs
produced adverse growth effects for peripheral regions as economic activity and
employment were displaced to urban regions. In another study of China’s
transportation networks, Banerjee et al (2020a) detect only a small positive effect
on sectoral GDP per capita and no effect on growth. Tsivanidis (2019) sheds further
light on the distribution of infrastructure gains, focusing on urban public transport.
He studies the construction of the world’s largest Bus Rapid Transit system in
Bogotá, estimating large aggregate output and welfare gains. However, he finds that
these were accrued slightly more by high-skilled workers, despite this being a
service relied upon more by the low skilled. Here, his model points to knock-on
effects on commuting costs, commuting decisions and wages. Together, these
studies underline the emphasis that must be placed on general equilibrium effects
in the study of transportation infrastructure, and provide a cautionary note to
policymakers attempting to use such investments as means of targeting certain
groups or regions.

Another consideration which must factor importantly into infrastructure

investments relates to environmental concerns. For example, Balboni (2019)
documents the high coastal concentration of populations and infrastructure and
demonstrates the negative impact of rising sea levels on the profitability of this
allocation. She argues that, under a central sea level rise scenario, 72 percent higher
welfare gains could have been achieved by a foresighted allocation avoiding the
most vulnerable regions. Others have cautioned that improved transportation
infrastructure risk deforestation and biodiversity loss (Damania & Wheeler, 2018;
 11

Dasgupta & Wheeler, 2016). These highlight the importance of accounting for
future environmental change when making contemporary infrastructure investment
decisions. Sustainability considerations must also steer the nature of the
transportation investments being made and how these are powered. Here, an
encouraging example is India’s Dedicated Freight Corridor, a major infrastructure
investment which stands to increase India’s share of rail in freight transportation
and generate significant reductions to CO2 emissions (Pangotra & Shukla, 2012).

Alongside transportation infrastructure, another force which may act to facilitate

trade is the improved circulation of market information. Here, the fast expansion of
ICTs, in particular mobile phones, has been shown to generate major efficiency
gains. For example, Jensen (2007) documents how the 1997-2000 expansion of
mobile phone coverage along India’s Keralan coast allowed fishermen to call sellers
at different markets in search of the best price for their output. This resulted in a
dramatic fall in price variation across local markets, higher profits and the
elimination of waste, generating welfare gains for producers and consumers alike.
Similarly, Aker (2010a) finds that the 2000-2006 introduction of mobile phones in
Niger reduced price dispersion by 10 to 16 percent and increased profits, which she
attributes to reduced search costs for farmers.

3. Labor Markets and Structural Change

Development is all about structural change, that is the movement of people from
less productive to more productive jobs. In many cases, this involves movement
across geography, for example from the countryside to cities or from poor to rich
countries. How technology can encourage this process of development is an area of
significant interest in which research in economics is beginning to make some
inroads. These technologies, however, also imply that the nature of work is
changing, with the enormous expansion of platform-type employment as well as the
disruption arising from the mechanization of many occupations. Technology thus
has the ability to create new employment opportunities as well as to destroy them.
Navigating the path to understanding how technology influences labor markets will
require a much better understanding of how precisely occupational structures are
being affected, rather than assuming that technology will be either a good or a bad
thing for employment.
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3.1 Bridging the employer-employee information gap

Research has shown labor market frictions to be an important impediment to firm

growth (Greenwald, 1986; Gibbons & Katz, 1991; Abebe et al, 2016a; Abebe et al,
2016b), suggesting that improving the efficiency of the job-matching process could
be crucial for developing countries. This may be especially the case given their large
youth populations, with over 10 million Africans entering the labor force annually
(Mohammed, 2015), coupled with the high youth unemployment rates
characterizing many poorer regions (McKenzie, 2017). Here, technology offers
immense opportunities, particularly in labor markets where information may be
scarce and for workers considering migration.

In their seminal paper, Bryan et al (2014) show that encouraging workers to

seasonally migrate to cities improves the welfare of rural households in Bangladesh.
This is predicated on workers being able to find jobs. Technologies which allow
them to do so and indeed allow employers to contract workers for specific tasks are
becoming ever more prevalent across the developing world. For example, many of
India’s migrant workers are contracted online by recruitment companies to fill
positions carrying out a huge range of services in Indian cities. Babajob is the
country’s largest marketplace for informal and entry-level formal jobs, having
registered 6.1 million jobseekers and over 370,000 employers across India as of
2018. To promote its accessibility, the platform offers a range of online and offline
access options, including internet, text messaging and interactive voice response
(GIE, 2018).

The availability of contracting online has also meant that large numbers of
workers from low- and middle-income countries can secure employment across
international borders before migrating to these jobs. Some obvious examples of this
are the huge numbers of workers who move from India, Pakistan and Bangladesh
to the Gulf countries to work in construction and other activities.4 But online
contracting is also central to the movement of health workers and domestic maids,
for example from the Philippines to a whole range of countries (Calenda, 2016).
The advent of these technologies implies that labor markets have become much
broader, in effect expanding job opportunities from the national to the international.

While the benefits in theory could be large, existing research on technology’s

impact on the efficiency of the job-matching process is extremely limited. Dammert
et al (2015) provide the first experimental evidence in a study of a public labor
market intermediation service (LMI) in Peru, randomly assigning registered job
seekers to be contacted via SMS or traditional methods (in person or by phone).
They detect a positive impact on employment which was larger for SMS

4
See, for example, the Musaned electronic platform used in Saudi Arabia to hire
Bangaldeshi domestic workers.
 13

intermediation, though not statistically significantly so. Moreover, the employment

effect dissipated after three months and was not accompanied by an effect on
matching efficiency. They furthermore note that those with less labor market
experience seemed to benefit less from the service and were less likely to search for
jobs through digital means. Ultimately, digitization of the intermediation service
proved both viable and cost-effective but was not in any way transformative.

Overall, the body of research on these technologies is too small to reach a

conclusion regarding their impact on job search behavior, migration, unemployment
duration, the quality of matches and labor market efficiency in developing countries.
Moving forward, attention should also be paid to their inclusionary potential, for
example the effectiveness of Babajob’s use of different access options in combatting
potential barriers such as illiteracy. Ultimately, it is also clear that technologies that
facilitate job searches will be restricted to regions with sufficient
telecommunications and electricity infrastructures. Complementary investments in
these will be vital to ensure the success of any such platforms. However, it is clear
that by increasing the size of the markets over which workers can search and by
improving matches between employers and workers, these technologies
undoubtedly hold promise.

3.2 Transforming the world of work

Technological advances prompt questions about the future of work, with

automation and digitization threatening the existence of jobs that can be carried out
by robots. Prominent examples include assembly-line work and clerical jobs
involving “routine tasks” (Autor et al 2003). Indeed, various studies have attributed
declines in employment in these positions in the US across the 20th century to
automation and digitization (Autor et al, 2003; Autor, 2015; Levy & Murnane,
2004). Conversely, others have emphasized complementarities between automation
and human labor, painting a more optimistic picture for the future of work. This
relates to a conjecture by Autor (2014) that some tasks may be inherently
“uncodeifiable”. In this way, automation may enhance the value of labor that
humans can uniquely supply and protect certain occupations from substitution
altogether. This is consistent with the phenomenon of job polarization that has been
well-documented in developed countries, i.e. the simultaneous growth of high-skill,
high-wage and low-skill, low-wage occupations.5

See Goos & Manning 2007; Goos, Manning and Solomons 2014; Autor & Dorn
5

2013; Autor, Dorn and Hanson 2015; Autor, Katz and Kearney 2006, 2008; Autor
2014; Michaels, Natraj and Van Reenen 2014; Graetz & Michaels 2015
14

What can these debates, which have largely revolved around developed
countries, tell us about what lies in store for countries at earlier stages in the
structural change process? On the one hand, the “alarmist” view argues that larger
employment shares in low-skill work in developing countries imply that more of
their jobs could feasibly be taken over by technological change that is skill-biased.
Indeed, the World Bank (2016) estimates that two-thirds of all jobs in developing
countries are susceptible to automation. Others have furthermore warned of
potential “reshoring”, where labor in poorer countries gradually loses its cost
advantage to robots in richer ones, ceasing the outsourcing of manufacturing that
has hitherto been an important source of growth (Shlogl & Sumner, 2018; Maloney
& Molina, 2016). For these reasons, Shlogl and Sumner (2018) project that, in
developing countries, automation will cause wage stagnation and “premature
deindustrialization”, as proposed by Rodrik (2016). On the other hand, by breaking
existing barriers to entry and efficiency, Maloney and Molina (2016) argue that
technology may support new ICT-intensive industries. For example, Kenya’s M-
PESA mobile money program works with nearly 400,000 agents across the
Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique and
Tanzania (Vodafone, 2020), and India’s IT sector created 200,000 new jobs in 2019
alone (Bhattacharya, 2020). Further dampening concerns surrounding automation,
others have pointed out that technologies typically diffuse at an altogether slower
rate in developing countries. Indeed, many of the jobs being carried out by humans
in poorer regions have long-since been automated in developed countries (World
Bank, 2016).

Several notable attempts have been made to quantify technology’s impact on

labor markets in developing countries to date. Maloney and Molina (2016) use
census data to test for job polarization in the developing world, of which they find
no strong evidence. However, they point to a relative decline in employment in the
“plant and machine operators and assemblers” category in Indonesia, Brazil and
Mexico since around 2000 as potential evidence of incipient de-industrialization. In
another study, Hjort and Poulsen (2019) provide the first direct evidence on the
causal relationship between ICTs and labor markets in a developing country
context, exploiting the gradual arrival of fast internet in a range of African countries.
They detect a large increase in employment rates and argue that this is driven by job
creation in higher-skill occupations. For example, they find evidence of firm entry
in South Africa, primarily in ICT-intensive sectors such as finance, and increased
productivity of existing firms in Ethiopia. Moreover, the authors show that, after
obtaining a fast internet connection, firms in Ghana, Kenya, Mauritania, Nigeria,
Senegal, and Tanzania seemed to engage in more exporting, online communication
with clients and training. These benefits appear to have also extended to those with
lower skill levels. In particular, the increase in the probability of employment that
the authors observe is of comparable magnitude for those with primary, secondary
 15

and tertiary education. Together, these results paint a different picture to that
described by the more alarmist view of technological change’s labor market impact.

Overall, we are yet to find rigorous evidence of labor market polarization and
displacement in developing countries of the kind experienced in developed
countries to date. However, this is an understudied area far from the point of
consensus. Additional uncertainty for workers in developed and developing
countries alike is introduced by future technological advances that will inevitably
extend the range of automatable jobs. Here, machine learning and artificial
intelligence have raised particular concerns, given their potential to master “non-
routine” tasks (Autor, 2015; Webb, 2019).

With vast uncertainty ahead, countries must enact forward-looking policy

change to equip their labor forces as best possible. Here, many have proposed a
focus on education investment in the hope that this will allow developing countries
to ride the wave of skill-biased technological change. Encouragingly, the World
Bank (2019) report that, between 2000 and 2014, the share of employment in high-
skill occupations increased by 8 percentage points in Bolivia and 13 percentage
points in Ethiopia. However, Schlogl and Sumner (2018) caution that education is
no panacea. Indeed, even developed countries with far higher average skill levels
are struggling to insulate their labor forces from competition with new technologies.
Rather, the authors underline the likely future importance of a social safety net. How
exactly developing countries might fund this remains an extremely pressing open
question.

3.3 Widening access to quality education

Education represents a critical input to labor markets and development, and it is

the focus of SDG 4: to “ensure inclusive and equitable quality education and
promote lifelong learning opportunities for all” (UN, 2020). As described above,
educational investments may also help equip the labor force for future skill-biased
technological change. It is estimated that there were 750 million illiterate adults in
2016, largely concentrated in South Asia and sub-Saharan Africa, and 262 million
children aged 6 to 17 out of school in 2017 (UN, 2019). However, measures to
increase enrolment will do little to improve attainment unless the education
provided in schools is of high quality (Banerjee et al, 2007). Whether technological
applications can help guarantee this has been the focus of an increasing number of
studies.

One important strand of the literature has focused on computer-assisted learning

(CAL). This consists of educational software programs which often adjust to
students’ achievement levels. Optimists have highlighted how these can target some
16

of the issues endemic to education provision in developing countries, such as

underqualified teachers and large classrooms with significant heterogeneity in
student learning levels. Indeed, in their review of the literature on education and
technology, Bulman and Fairlie (2016) note that effects are generally stronger in
developing country contexts, perhaps due to lower levels of human capital.
However, this overall positive result masks some important nuances.

In particular, Banerjee et al (2007) conduct a randomized evaluation of a CAL

program in Vadodara, India. Here, grade 2 students were given weekly access to a
computer for playing math games which tailored themselves to students’
achievement levels. The authors detect substantial test score gains, though these
dissipated over time. In another study of India, Muralidharan et al (2019) evaluate
the “Mindspark” CAL program for after-school instruction of middle-school
students, which also offers customized content. They find significant improvements
in test scores which were particularly large for weaker students, implying the
program effectively catered to a wide range of learning levels.

On the other hand, in a randomized evaluation in Gujarat, Linden (2008) found

that CAL caused students to learn significantly less when computers were used as a
substitute for the normal curriculum. However, when used as a complement, i.e. as
an out-of-school program, CAL had a positive effect on learning, especially for
weaker students. This the author attributes to the program’s design, which reviewed
material in the existing curriculum. Outside of India, Carrillo et al (2009) evaluate
a mathematics and language CAL program for primary school students in Ecuador.
They detect positive impacts on mathematics test scores and an insignificant
(negative) effect on language test scores. Together, these results suggest that CAL
is able to promote learning for students of a wide range of abilities, but also reinforce
the importance of careful format design and considerations of the context into which
CAL is being implemented.

In contrast to generally positive results in evaluations of CAL, programs focused

on improving access to computers have shown limited success. Such was the case
for Beuermann et al (2015), who analyze an experiment in Peru in which students
were given a laptop for home use and fail to detect an impact on academic
achievement. In another study, Barrera-Osorio and Linden (2009) evaluate a
national program in Colombia to install computers in public schools, also training
teachers on how to use them in specific subjects. Here again, the authors detect no
impact on student outcomes, which they attribute to their limited incorporation into
classroom teaching. These results underline the potential ineffectiveness of
interventions that do not tailor technologies to a specific need.

Throughout this chapter, we have documented how successful applications of

mobile technologies can have a vital impact on living standards and economic
development. In addition to their use in school instruction, these encompass digital
 17

agricultural extension programs, mobile money, online job portals, social media and
simple SMS-communication. However, the persistent problem of illiteracy in
developing countries serves as an important barrier to their use, preventing people
from accessing the associated benefits. While development initiatives have taken
measures to help overcome this, for example harnessing interactive voice response
technologies, another solution is to tackle the problems of illiteracy and digital
illiteracy head-on via targeted initiatives. Research has also shown that this can in
turn enhance learning outcomes in other areas.

In particular, Aker et al (2012) evaluate the experimental incorporation of mobile

phone instruction into a standard adult education program in Niger. This was found
to substantially increase writing and math test scores compared to the original
model, with a relative improvement in math scores still visible after seven months.
The authors attribute this to improved motivation and effort in the classroom, which
links to their conjecture that being able to use mobile phones for other services
increases the returns to education. Treated students also used mobile phones more
actively beyond the classroom, which may have served as means for them to
practice their skills. In a later study of the same program, Aker and Ksoll (2020)
document that immediate gains in reading scores persisted after two years, and also
reveal a wide range of other socioeconomic effects. In particular, individuals who
received additional mobile phone instruction had more diverse income-generating
activities, improved food security and asset ownership, were more likely to sell a
cash crop and were more likely to save. The authors were unable to disentangle
whether these effects are due to improved learning outcomes or use of the mobile
technology itself, an important question for future research.

Overall, the limited success of programs focusing on the distribution of hardware

suggests that access to technology may not be the binding constraint to its successful
use in education (Bulman & Fairlie, 2018; Escueta et al, 2016). Rather, this seems
to depend on the careful design of the CAL programs that students use them for and
their thoughtful integration into existing curriculums. In these cases, it has been
proven that technology may enhance the learning of students across the achievement
spectrum. Moreover, it appears that equipping students with digital literacy can
improve learning outcomes in traditional areas of academic study and generate
further welfare and economic benefits. However, the success of technology-enabled
education broadly rests on the quality of telecommunications and electricity
infrastructure, which remains dire in many developing contexts. In sub-Saharan
Africa in particular, under 50 percent of all primary and lower-secondary schools
have access to electricity, the Internet, computers and basic drinking water (UN,
2019). Investing in these crucial amenities must be a first order priority for
education initiatives.

It is also vital that we do not to understate the importance of human capital.

Improvements in educational outcomes will hinge on the skill, motivation and
18

efforts of teachers in the delivery of both ICT-enhanced and more traditional

lessons. Indeed, Aker et al (2012) note that teachers in their sample with higher
education were “better able to harness mobile phones to improve students’
educational experiences”. Here, technology can also play its own role, for example
in enabling the monitoring of teacher attendance. In an experiment in India, Duflo
et al (2012) show that such initiatives can provoke substantial increases in
attendance with positive knock-on effects on student outcomes.

There is also hope that technology can be exploited to educate children in settings
where teachers are unavailable altogether. This has become particularly salient in
light of the COVID-19 pandemic. For example, the Vodafone foundation reports
that over 1.1 million young people in Africa are accessing educational materials
online via their e-school programs (Vodafone, 2020). Here, future research must
also consider whether and how technology can be used to tackle the vast gender
gaps in academic achievement and enrollment that are particularly endemic in
developing countries.

4. Financial Technologies

Throughout this chapter, we have documented the range of new opportunities for
communication and service provision that have accompanied mobile technology’s
fast expansion throughout the developing world. One such case is financial
technologies, namely mobile money. This generally refers to the application of
mobile phones for sending and receiving money. Transfers take place via SMS for
a small fee, and do not require ownership of a formal bank account. Deposits and
withdrawals are made by visiting a mobile money agent, a process akin to
exchanging cash with ‘e-money’. In this way, mobile money is far removed from
the mobile banking applications used by many in developed countries.

Demirgüç-Kunt et al (2020) estimate that there are 1.7 billion unbanked adults
globally, 1.1 billion of whom have a mobile phone. This has sparked enthusiasm
surrounding mobile money as a way of bringing formal financial institutions to
populations hitherto reliant exclusively on cash. In doing so, it has the propensity to
significantly reduce transaction costs and facilitate saving, with important
implications for welfare and development. For firms and governments harnessing
mobile money for the transfer of wages and welfare payments, there is also scope
for significant efficiency gains and reduced leakage. However, whether this
technology actually constitutes a development ‘leapfrog’ for low-income countries,
whereby mobile banking facilitates universal financial inclusion whilst bypassing
the formal banking sector, remains unclear. This may crucially depend on countries’
 19

regulatory frameworks, among other important factors. These issues are discussed
in this section.

4.1 Increasing financial resilience

In the absence of access to financial services, households revert to inefficient,

risky and costly methods for making transfers to friends and relatives. These include
informal practices, such as asking friends or bus drivers to pass on cash, and use of
money transfer services, such as Western Union (Aker, 2018). Mobile money stands
to significantly facilitate these processes – senders can transfer funds through a
simple SMS, requiring only that both parties own a mobile phone and the payment
of a transaction fee. A new body of research is beginning to show that, in doing so,
mobile money is having an important impact on household financial behavior and
welfare.

This question is examined by Jack and Suri (2014) in their seminal study of M-
PESA, the developing world’s most renowned mobile money success story. The
authors document that users experience a significant reduction in the transaction
costs associated with sending remittances, which in turn facilitated inter-household
risk sharing. In particular, following a negative income shock, M-PESA users
received more remittances and from a wider range of sources, allowing them to
avoid cutting their consumption. In another study of the same program, the authors
reveal that improved smoothing also extended to negative health shocks (Suri et al,
2012). Batista and Vicente (2019) confirm that these effects are not limited to
Kenya’s M-PESA, offering some of the first experimental evidence in a study of
rural Mozambique. Here again, they detect evidence of improved smoothing and
reductions in hunger episodes, which they attribute to increased receipt of
remittances. These studies speak to mobile money’s ability to bolster the financial
resilience of poor households in the face of shocks that would have otherwise cut
into their consumption and education spending, suggesting significant welfare
gains.

Beyond facilitating consumption smoothing, there is evidence of wider

socioeconomic effects following mobile money’s introduction. For example, in
rural Mozambique, Batista and Vicente (2019) detect a fall in agricultural activity
in treatment areas as well as an increase in out-migration. Here, they propose that a
fall in the cost of sending remittances induced households to invest in migration
rather than in agriculture. Other research in economics has shown that migration in
turn can be a route out of poverty (Bryan et al, 2014). Similarly, in a long-run
evaluation of M-PESA’s economic impacts, Jack and Suri (2016) estimate that
access to mobile money lifted almost 194,000 households, equivalent to 2 percent
20

of Kenyan households overall, out of extreme poverty, which they attribute to

improved financial resilience and savings. They also document a shift of women
out of subsistence agriculture and into business and retail occupations. Together,
these studies indicate a causal link between mobile money and development via
improvements to the economic lives of the poor.

Recent years have seen mobile money extending beyond simple transfer and
savings facilities to include other traditional financial services, such as loans. For
example, Safaricom’s M-Shwari enables consumers to open a bank account and
make deposits and withdrawals via M-PESA. They can also request a loan, the
decision for which is based on financial history data (Suri, 2017). In their
evaluation, Bharadwaj et al (2019) document that M-Shwari had high take-up and
effectively improved access to credit and resilience to income shocks. However, the
potential for transformative socio-economic impacts was limited by the small and
short-term nature of the loans. In another study of Indonesia, Harigaya (2017)
evaluates the experimental digitization of a group microfinance program via mobile
money, which meant deposits and withdrawals were more convenient and could be
carried out in the absence of peers. The author detects a decline in savings, which
he attributes to a weakening of the peer effects that underline the motivation for
group banking, as well as sensitivity to fees, which, though small, appeared to
increase the salience of transaction costs. Blumenstock et al (2016) study a separate
mobile money innovation in which this was used for wage payments in an Afghan
firm, and half of employees were experimentally assigned a 5 percent default
savings contribution. This was found to significantly increase savings, which the
authors attribute to the overcoming of behavioral barriers. Together, these studies
highlight the potential for innovative applications of mobile money, but caution that
behavioral factors can work to both their advantage and disadvantage.

4.2 Facilitating firm and government transactions

In recent years, applications of mobile money have been extending from person-
to-person payments to also include person-to-business and government-to-person
(or NGO-to-person) payments (Suri, 2017). This can include the payment of wages,
as described above, as well as the transfer of welfare payments to households,
transactions which would otherwise have to take place via cash. In this way, mobile
money may produce important efficiency gains for firms, governments and NGOs.
This question is evaluated by Blumenstock et al (2015) in another RCT in
Afghanistan wherein a subset of employees was transitioned from cash to mobile
money payments. They detect significant benefits to the organization, which
included significant savings in salary disbursement activities. In an experiment in
Niger, Aker et al (2016) study an NGO application of mobile money to send
 21

emergency cash transfers to households following a drought, of which women were

the primary beneficiaries. Here, households in which women received electronic
rather than cash payments had improved diet diversity and their children consumed
1/3 of an extra meal per day. In addition to time savings in obtaining the transfer,
the authors present evidence of improved female bargaining power to explain their
results. Overall, these studies show that the efficiency gains enabled by mobile
money can benefit both firms and households.

Applications of mobile money are also coming to form an important part of the
COVID-19 response, partly to prevent disease transmission via cash exchanges. For
example, telecommunications operators across Africa, including M-PESA, have
removed fees on small mobile money transactions (Flood, 2020). Others have
lowered the barriers to opening accounts, such as by waiving additional
documentation requirements (Peyton, 2020). In a move to support struggling small
businesses, M-PESA has also raised daily transaction limits (Finextra Research,
2020). Similarly, governments have been using mobile money to scale up
emergency welfare programs. For example, Togolese informal workers have been
able to register for and a receive a state grant via their mobile phones (Financial
Times, 2020). The UNCHR has also been distributing mobile phones and SIM cards
to displaced families and making assistance payments into these (Faivre, 2020).
This positive shock to the use of mobile money stands to kick-start its diffusion in
areas whether adoption has been hitherto limited.

Dampening enthusiasm surrounding mobile money are concerns surrounding its

inclusionary potential, i.e. whether mobile money can effectively extend access to
financial services throughout the developing world. This relates to the finding that
initial adopters of mobile money may be positively selected in terms of education
and income (Batista & Vicente, 2020; Suri et al, 2012). Here, researchers have
pointed to potential barriers such as lack of trust, illiteracy, affordability and
possession of official documents required to sign up for accounts, issues which may
disproportionately affect women. Indeed, the GSM Association (2019) report that
women in low- and middle-income countries are 10 percent less likely to own a
mobile phone and 23 percent less likely to use mobile internet in the first place. This
ownership gap extends to 28 percent in South Asia. These figures underline the need
for more research into what drives female adoption of mobile phones and mobile
money in particular.

Another important barrier to the widespread diffusion of mobile money is the

strength of the agent infrastructure, to which Suri (2017) attributes M-PESA’s
success relative to other mobile money initiatives. For example, in her study of
Niger, Aker (2018) discusses how, in one region, households lived an average of 15
km away from the nearest agent. In such contexts, adoption of mobile money was
low, despite high costs of alternative methods for sending remittances and high
ownership of mobile phones.
22

Overall, it is clear that mobile money is already beginning to transform the

landscape of financial services in the developing world. Its use has been proven to
facilitate transactions for individuals, firms, governments and NGOs, translating to
improvements in efficiency and changes in household financial behavior that stand
to have long-run implications for development. Recent years have also seen mobile
money technology applied to a range of other financial services characteristic of
more traditional bank accounts. However, whether these can have the
transformative impact that appears to accompany mobile money’s basic transfer and
savings functions is yet unknown. There are also many remaining questions
surrounding the factors that impact the widespread diffusion of mobile money,
including behavioral biases, the agent infrastructure, illiteracy and affordability.
Moving forward, there is high demand for further rigorous economic evidence to
inform these debates.

5. Energy and Environment

To this day, nearly 1 billion people remain without an electricity connection, and
many others receive only partial and intermittent supply (IEA, 2019). Lack of access
to this vital technology constrains the set of productive activities households can
engage in and inhibits firm performance. The desire to scale energy generation to
close this gap has inspired investments into both national grid capacity and
alternative off-grid technologies. However, as with any other form of technology,
availability may not be the binding constraint to its successful use. Rather, barriers
such electricity theft and poorly functioning utilities continue to inhibit the
uninterrupted flow of power to households and firms and its associated benefits for
growth and development. Simultaneously, it is vital that growing energy demand in
developing countries is met with sustainable sources. These challenges can only be
met by harnessing technological innovation.

5.1 Scaling energy access

It has been well-documented that reliable energy access is an essential ingredient

to economic development (Moneke, 2019; Lipscomb et al, 2013), with many
emphasizing an important firm performance channel. For example, both Kassem
(2020) and Rud (2012) detect positive impacts of electrification on the entry and
performance of manufacturing firms in their respective studies of Indonesia and
India. In their evaluation of the Indian textiles industry, Allcott et al (2016)
furthermore document that electricity shortages reduced average output by about
five to ten percent, underlining the importance of the grid’s reliability.
 23

Another dimension of electrification’s promise lies in its potential to generate

behavioral change, namely by allowing households prolonged access to light and
powering time-saving appliances such as fridges and microwaves. These extend the
time available for studying and productive tasks, which may in turn generate longer-
run economic benefits to further motivate electrification efforts. Several studies
have attempted to capture these effects. Most notably, Dinkelman (2011) studies
South Africa’s mass roll-out of the grid to rural households. She finds that
electrification significantly boosted female employment by releasing women from
home production and enabling microenterprises. This positive impact on female
employment is also detected by Grogan (2018) in his study of rural, indigenous
households in Guatemala. Interestingly, Fujii and Shonchoy (2020) furthermore
find evidence of a negative impact of electrification on fertility. Ultimately, effects
of this nature are harder to study, and so much remains unknown as to the longer-
run social and economic impact of electrification. However, it is vital that these
remain an important focus of research, lest we understate the benefits of and
therefore underinvest in electricity.

In line with the well-documented benefits of electrification, infrastructure

investments to scale up national energy generation and transmission have become a
mainstay of development policy. Here, many African countries are turning to
hydropower, exploiting the abundant water supply provided by their rivers. A
landmark example is the Grand Ethiopia Renaissance Dam, set to become Africa’s
largest hydropower project with a 6,000 MW capacity (Power Technology, 2020).
Overall, hydropower is set to provide 90 percent of Ethiopia’s electricity, and also
constitutes a promising avenue for growth as it intends to export surplus to
neighboring countries (IHA, 2017). In South America, Brazil houses the continent’s
largest installed hydropower capacity (IHA, 2018), which accounts for around 80
percent of domestic electricity generation (IEA, 2020). Solar has become another
important avenue for scaling national energy generation. In 2016, Rwanda saw the
completion of the Rwamagana Solar Power Plant, whose 8.5 MW capacity made it
East Africa’s first utility-scale solar power plant (Mininfra, 2020). Another standout
case is Kenya, quickly approaching 100 percent renewable energy generation
thanks to investment in geothermal, wind and hydropower sources. In 2019, it
opened The Lake Turkana Wind Power farm, the largest in Africa with 365 turbines
and a 310 MW capacity (Dahir, 2019).

In spite of the aforementioned investments in national energy capacity, a

significant share of the developing world is expected to remain off-grid due to the
high cost of extensions to remote, rural areas. In particular, of the 315 million set to
gain access to electricity in Africa’s rural regions by 2040, it is estimated that only
30 percent will be connected to national grids (African Progress Panel, 2017).
Instead, many are anticipated to be electrified via off-grid and micro-grid
technologies. These can consist of systems powering individual households or
24

larger-scale ones serving several at a time. They are able to reach remote regions at
relatively low cost and can be powered by renewable sources. Smaller devices are
insufficient for powering large appliances such as fans, fridges and TVs, instead
primarily intended for phone charging and lighting. These technologies have been
met with much enthusiasm and are inspiring a generation of tech entrepreneurs. For
example, in Côte d’Ivoire, Evariste Akoumian’s Solarpak makes backpacks with
built-in solar panels that collect energy while children walk to school (Capron,
2016). These absorb enough energy during the day to power a lamp for four to five
hours - enough to allow children to do their homework at night.

In practice, however, evidence from India suggests that the theoretical benefits
of microgrids have not always manifested. In a study targeting non-electrified
households in Uttar-Pradesh, Aklin et al (2015) installed solar microgrids in 81
randomly selected villages that were previously reliant on kerosene lamps to light
their homes. They document an increase in electricity supply, as indicated by
reduced kerosene expenditure, but detect no broader socio-economic impacts. Here,
they suggest that the power supply supported by the microgrids had been
insufficient to encourage business activities or the accumulation of social and
human capital.

Others have assessed the microgrid’s viability in contexts where it is available

alongside the grid. In a study of Bihar, Burgess et al (2020a) conduct an experiment
in which microgrids were offered to a sample of villages at different prices. In this
setting, households were also faced with the choices of individual household solar
panels (own solar), diesel generators and the grid, which was being rolled out over
the course of the study. They found that, at market price, just 6 percent of
households purchased microgrids, increasing to 19 percent under a 50 percent
subsidy. Moreover, they saw microgrid demand collapse following grid extensions
and improvements in own solar quality. Overall, they argue that richer households
have a strong preference for the grid’s higher capacity, and predict that future
income growth will drive electrification primarily via the grid. Simultaneously, off-
grid solar will play a key role for poorer households in more remote areas. In this
sense, off-grid solar, though highly valuable in situations where the grid alternative
is not available, may ultimately be supplanted by the grid. Interestingly, however,
the grid itself may increasingly be powered by renewables, including solar. In
another study in India, Fowlie et al (2019) document one company’s experience
deploying microgrids in Rajasthan. These are also met with low demand, eventually
forcing the company to cease its operations. Here, the authors point to competition
with the grid, with politicians’ promises of imminent local extensions potentially
deterring microgrid purchases.

Ultimately, in the face of large government subsidies for grid connections,

microgrids may find it impossible to compete. In India in particular, the government
has several schemes offering free grid connections to households below the poverty
 25

line. Here, Fowlie et al (2019) argue for transparency in state expansion schedules
and measures to ensure microgrids can be technologically integrated into the grid if
and when this does arrive. Demand for microgrids also seems to be constrained by
their relatively low capacity, which in turn may inhibit the socioeconomic benefits
of electrification from manifesting. In this regard, there is certainly room for tech
professionals to provide valuable improvements to these energy provision systems.

A natural conclusion of the above discussion on the development benefits of the

grid, combined with the proven limitations of off-grid alternatives, would be to
pursue rapid universal grid extension. However, a number of recent studies have
documented that such efforts may too be alone insufficient to secure the economic
benefits of reliable access. In particular, in a study of Western Kenya, Lee et al
(2016a) reveal that, despite high population density and extensive grid coverage,
electrification rates remain at 5 percent on average for rural households and 22
percent for rural businesses. Moreover, half of unconnected households are “under
grid”, meaning they could be connected to a low-voltage line at a relatively low
cost. In another study, Lee et al (2016b) experimentally offer households in this
setting the opportunity to connect to the grid at different subsidized prices. They
detect surprisingly low demand even at high subsidy rates, which combined with
costs of supplying connections, imply rural electrification may even have reduced
welfare.

Researchers have proposed different explanations for the advent of low grid
demand. Lee et al (2016b) point to credit constraints and the overall low quality of
grid provision, with evidence of excess costs from leakage during construction,
bureaucratic red tape, low grid reliability and unaccounted for spillovers. For
example, in addition to short-term blackouts lasting minutes or hours, households
in rural Kenya face long-term blackouts which can extend for months. Others have
argued that issues of grid quality are themselves a function of poor enforcement of
payments and informal connections, i.e. individuals illegally connecting for free, a
pervasive problem in developing countries. This is documented by Burgess et al
(2020b) in their study of Bihar, whose state electricity utility recovers just 34
percent of its costs. They argue that this is overwhelmingly the result of electricity
having been treated as a right regardless of payment, producing tolerance for
subsidies, theft, and non-payment. The end result is an insolvent utility dependent
on government bailouts and tightly rationed supply. McRae (2015) studies a similar
paradox in Colombia. He demonstrates that quality upgrades are unprofitable for
utility firms, as the state subsidizes their losses and low-income households prefer
to receive a low-quality service for which they do not pay.

Ultimately, many developing countries are stuck in a low-quality electricity

equilibrium in which households pay little for poor supply and governments battle
the competing objectives of sustaining utility companies and retaining the political
support of low-income households. More research must focus on finding paths to
26

enhancing the reliability of grid supply and improving the organizational

performance and financial sustainability of utilities. Without doing so, it may be
impossible to generate the level of demand for and supply of reliable electricity to
achieve the development benefits of electrification.

5.2 Guaranteeing sustainability

World energy demand is on the rise, with the majority of growth set to stem from
low-income countries (Wolfram et al, 2012). While this has the potential to spur
welcome growth and development, higher energy consumption will also increase
levels of pollution and other externalities. Though some national grid investment
projects involve large-scale exploitation of renewable energies, others raise
sustainability concerns. For example, the China-Pakistan Economic Corridor
consists of $60 billion worth of infrastructure projects, including $35 billion for the
scaling-up of Pakistan’s energy supply (Stacey, 2018). Almost 75 percent of the
new generation capacity will be coal-fired, contributing to an expected rise in the
coal share of Pakistan’s energy mix from 3 percent in 2017 to 20 percent in 2025
(Downs, 2019). Efficiency issues also arise on the consumer-end, with non-
technical losses such as electricity theft prevalent across the developing world, as
discussed above. In sub-Saharan Africa in particular, Kojima and Trimble (2016)
estimate the total annual value of uncollected electricity bills at 0.17 percent of
national GDP on average. In this section, we discuss the potential for technological
innovations to promote both sustainability and the efficient production and
consumption of energy.

Electronic meters represent one such technology hailed as a potential solution to

energy losses. One variety is the smart meter, which records electricity consumption
and communicates this to the distribution company. These were a feature of the
microgrids deployed by Fowlie and Wolfram (2018) in Rajasthan, India. Here,
however, the authors found that interpersonal relations and inter-caste dynamics
rendered operators unwilling to enforce penalties in practice, making cost recovery
impossible and the scheme ultimately unviable. Moreover, in his study of Colombia,
McRae (2015) argues that grid upgrades involving the installation of meters are
unprofitable for utilities, given that many households would be unwilling to pay a
non-zero marginal cost even for a higher quality supply and that their existing losses
were covered by state subsidies.

Perhaps a more promising technological solution is that of pre-paid metering,

which has grown in popularity across both the developed and developing world.
Here, consumers must credit their accounts in order to access electricity, thus
transferring the enforcement burden away from the utility. Jack & Smith (2020)
 27

evaluate the viability of this technology in a study of Cape Town, South Africa in
collaboration with the local utility. They detect a 14 percent decrease in
consumption but a net increase in revenue thanks to improved cost recovery, mostly
driven by a subset of poor customers who were delinquent on bills. The authors
argue that the prevalence of this group in other developing countries suggests the
technology could be effective in other settings. However, they caution that they are
unable to assess the effect of the prepaid meters on theft, a large increase in which
could undo positive revenue effects.

Another category of technologies that may encourage sustainability are energy-

saving appliances, such as LED lighting. Evidence suggests that this can also have
positive productivity co-benefits, as was recently shown in a study of Indian
factories by Adhvaryu and Nyshadham (2016). The authors found that LED
lighting, which emits approximately seven times less heat, reduced factory floor
temperatures by several degrees, in turn leading to increased productivity. Another
notable example is that of cooking appliances. An estimated three billion people
across low- and middle-income countries continue to rely on traditional stoves and
solid fuels such as firewood, biomass or charcoal for heating and cooking (CCA,
2020). These contribute to deforestation and household air pollution, the death rates
for which are highly concentrated in developing countries (Landrigan et al, 2018).
Various initiatives have attempted to encourage transitions away from these harmful
methods, with varying success. Kar et al (2019) evaluate one such program in
Karnataka, India which uses loans and subsidies to promote the use of liquefied
petroleum gas. Despite increases in enrolment, they detect no impact on fuel sales,
suggesting beneficiaries were not fully transitioning away from solid fuels. This
underlines the potential barriers governments may face in encouraging households
to replace traditional appliances with cleaner ones, especially in cases where
individual gains are only felt once widespread adoption has been achieved.

Another major question facing developed and developing countries alike in their
attempts to shift towards renewables relates to energy storage. This is especially the
case for wind and solar as variable renewable energy (VRE) sources. For instance,
wind generation can be high at night, generating power at a time where demand is
low. Similarly, extra energy from peak sunlight generation cannot be easily stored
for use at a later period. Even more concerning is the prospect of increasingly
unpredictable weather patterns, which are only likely to heighten these issues.
Existing scientific efforts to overcome these challenges are primarily taking place
in developed countries. As such, solutions proposed are unlikely to be well-attuned
to the electricity infrastructures characterizing developing countries, which for
example often suffer from insufficient capacity (de Sisternes et al, 2019). In
recognition of this disparity, the World Bank has committed $1 billion to a new
program focused on accelerating investments in battery storage designed for
developing and middle-income countries (World Bank, 2018).
28

The extent of the challenge facing developing countries must not be understated.
In order to guarantee growth and development, it is necessary that they find paths
to scale up energy generation in a way that is sustainable for the planet and
financially viable. Off-grid alternatives have thus far seen limited success, and
without further technological adaptations, are unlikely to be able to meet the
growing energy needs of populations in developing countries. However, without
improvements to their organizational performance, national grids will also fail in
this respect. There is thus a vital need for the economics and engineering
communities to convene to design energy policies and programs that are suited to
the needs and constraints of developing countries.

6. State Capacity and Public Sector Delivery

The growth of low-income countries may be constrained by limited state

capacity, lack of transparency and accountability and poor public service delivery.
Technology can help address the agency problem in governments, both inside layers
of government, by improving government transparency, public service monitoring
and state effectiveness, and between government and citizens, by improving
accountability and expanding political participation.

6.1 Bolstering state effectiveness and accountability

An important theme throughout this chapter has been the importance of

infrastructure for growth and development. In addition to transport,
telecommunications and energy infrastructures, this extends to the administrative
and fiscal infrastructures used by government to raise and spend tax revenue. These
are critical for the effective provision of the welfare programs and public goods that
firms and households rely upon. However, these infrastructures tend to be much
weaker in developing countries. Here, tax shares in GDP resemble those of now
developed countries from 100 years ago (Besley & Persson, 2013) and
administrations are grappling with corruption, evasion and leakage (World Bank,
2003; Olken, 2006; Olken & Pande, 2012). This prevents the secure flow of funds
and services to intended beneficiaries and disproportionately hurts the most
vulnerable (World Bank, 2018a).

The question of how to tackle these issues is a vital one for development. Here
again, policymakers and economists have been hoping that at least part of the
answer lies in technological innovation. In particular, government administrations
 29

are increasingly harnessing ICTs and other forms of technology, ranging from
electronic procurement platforms to biometric authentication. These share the
general benefits of limiting informal interactions between officials and households
and firms and streamlining administrative processes. However, each can be faced
with its own limitations. These are discussed in the following section.

One essential faculty of the state is the procurement of goods and services from
firms, accounting for an estimated $820 billion of annual spending in developing
countries alone (World Bank, 2018b). However, this process is often marred by
corruption and collusion, for example where contracts are restricted to select
insiders and firms collude to raise prices. In the attempt to overcome this important
barrier to effective provision, governments have been transitioning towards
electronic procurement platforms (e-procurement) that provide a standardized
online mechanism for advertising bids and awarding and pricing contracts. By
increasing the transparency of the bidding process, reducing the cost of submitting
a bid and restricting interaction between officials and firms, e-procurement intends
to facilitate the entry of non-favored firms and those beyond the local area. This
enhanced competition may in turn improve project costs and quality. On the other
hand, a more sophisticated system risks excluding those without internet access.
Thus, whether e-procurement is ultimately to the benefit of competition or the
quality of public provision is an empirical question.

Lewis-Faupel et al (2016) provide some of the first rigorous evidence on e-

procurement, exploiting its gradual roll-out for public works programs in India and
Indonesia. This was found to improve project timeliness in Indonesia and road
quality in India, which the authors contend was driven by entry of higher-quality
firms beyond the home region. In another study, Abdallah (2015) documents
preliminary evidence on a similar e-procurement scheme in Bangladesh. He detects
a 12 percent decrease in the price-to-cost ratio of procurement packages, amounting
to over $10 million in estimated savings for 2013 alone. He suggests this may have
been driven by reduced political influence rather than by increased national
competition. Conversely, using cross-country evidence, Kochanova et al (2018)
find that e-procurement is only associated with higher public procurement
competitiveness in developed countries. Ultimately, despite a few promising results,
much remains unknown about the success of these initiatives and what might drive
the observed effects.

Another prerequisite for the efficient provision of public services is the

effectiveness of civil servants. To this end, various studies have evaluated the
application of ICTs to monitor employee performance and improve work
incentives. One notable example is a study by Debnath and Sekhri (2017) of school
meal provision in Bihar, in which intermediate officials had become a source of
leakage. In the attempt to tackle this problem, the state rolled out an Interactive
Voice Response System (IVRS) that made daily calls to schools to collect reliable
30

data with which to hold officials accountable. This reform was found to improve
the likelihood of lunch provision as well as the quality and quantity of meals,
suggesting a significant reduction in leakage. Other applications have targeted
absenteeism among frontline providers. For example, Duflo et al (2012) conduct an
experiment wherein tamper-proof cameras were used to record teacher attendance
in India’s NGO schools, data which was then used to determine wages. The authors
detect an impressive 21 percentage point decrease in absenteeism, which
furthermore translated into higher student test scores. In a similar experiment with
nurses, Banerjee et al (2008) also document an initial drastic improvement in
attendance. However, this began to dissipate after just 6 months, at which point the
health authority began to undermine the system through granting exemptions.
Together, these studies underline both technology-enabled monitoring’s potential
for motivating service providers and the necessity of political will for guaranteeing
successful implementation.

In developing countries, many households are acutely reliant on social safety

nets to fund basic expenditures, programs on which 1.5 percent of GDP is spent on
average by their governments (World Bank, 2018c). However, the effectiveness of
these well-intentioned initiatives can be seriously inhibited by leakage and identity
fraud, issues that another set of technology-enabled initiatives are attempting to
target. These include transitioning from cash to electronic disbursal of benefits, with
accounts linked to recipients’ biometric information. The Indian government in
particular has rested much hope on such technologies. Its Aadhaar program in
particular has become the world’s largest biometric digital identification system,
having registered over one billion users in just six years (Nilekani, 2018). Research
in economics is beginning to respond with evaluations of these efforts.

Muralidharan et al (2016) assess biometric authentication at scale,

experimentally introducing biometric smartcards for the receipt of pension and
workfare payments in collaboration with the Andhra Pradesh state government.
They detect large, positive returns that far exceeded costs for both programs,
including a reduction in leakages and “ghost beneficiaries”, i.e. false benefit claims
on behalf of other individuals, as well as improved public satisfaction. In another
study, Barnwal (2019) examines the Indian government’s deployment of biometric
authentication for household receipt of subsidized fuel, attempting to stem its
diversion to a black market for firms (who otherwise had to pay a higher, taxed
price). He argues that biometric authentication was initially effective in curtailing
this illegal activity. However, when the reform was unexpectedly reversed
following political lobbying by local officials, black market supply was quickly re-
established. Overall, these seem to suggest that programs utilizing biometric
authentication can effectively prevent the leakage of vital transfers, but may be
susceptible to loss of political will.
 31

A related technology that has been harnessed by the Indian government is e-

invoicing, whose application to their flagship workfare program is evaluated by
Banerjee et al (2020). These digital platforms enable “just-in-time” financing,
where funds are dispensed only in response to specific invoices, rather than in the
form of advances to be justified down the line. Drawing upon an experiment in
collaboration with the Bihar state government, the authors detect a fall in leakage
in the form of fewer ghost workers and a decrease in local officials’ wealth,
culminating in a 24 percent fall in expenditure. However, this was accompanied by
only a small increase in beneficiaries and no change in wages or projects completed,
as well as longer delays in household payments, consistent with the higher
administrative burden placed on local officials. Echoing the experience of Barnwal
(2019), the Bihar experiment was unexpectedly ceased after a few months.
However, a comparable scheme was subsequently rolled out across India, providing
the authors with a longer-run quasi-experiment. Here, they find a similar, persistent
fall in expenditure. Overall, e-invoicing seems to have yielded long-run fiscal
savings without generating direct benefits to households of the kind witnessed by
Mularidharan et al (2016). This relates to the broader question of the potential co-
existence of winners and losers to technological applications.

Many studies have documented significant savings following the deployment of

technology-enabled initiatives by governments in developing countries, sometimes
also translating into a higher quality of service for firms and households. However,
these have unsurprisingly sometimes been met with efforts by local officials with
vested interests to thwart their implementation. Overcoming these political barriers
is a vital obstacle to progress. The success of these initiatives will also rely upon
levels of technical proficiency and complementary infrastructure that may be hard
to come by in poorer regions, and demand significant investment to overcome
inevitable logistical hurdles. Such was the experience of Muralidharan et al (2016)
in India, where after two years, only around 50 percent of subdistricts had been
converted to smartcard payments. Furthermore, there remain many open questions
surrounding general equilibrium effects, in particular whether these initiatives
simply displace corruption to other areas.

Another area of increasing importance relates to the privacy concerns that

accompany large-scale state data collection efforts, particularly regarding their
potential use as part of wider state surveillance efforts (Drèze & Tiwari, 2016).
These have become highly salient in light of the COVID-19 pandemic, which has
seen several nations request the universal downloading of contact-tracing apps. In
many cases, there is limited transparency as to who can access the data and how it
might be used post-pandemic (O’Neill et al, 2020). Given the speed at which
administrations in developing countries have been harnessing technologies, it is
vital that research continues to respond with their rigorous evaluation.
32

6.2 Improving political participation and electoral integrity

Another channel through which technology stands to impact the functioning of

government is by increasing political participation. This view, described by
Diamond (2010) as the “liberation technology” argument, emphasizes that ICTs
such as internet, mobile phones and social media can facilitate communication and
information transmission and promote political mobilization. These technologies
are also being harnessed to increase the accessibility and integrity of elections,
namely by helping to overcome illiteracy and prevent the tampering of vote counts.
This is vital for the effective functioning of democracy and ensuring that people’s
preferences are reflected in policy, which too often fall short in developing
countries. These have in turn been shown to have implications for the extent to
which policies are efficient and support the needs of the most vulnerable (Becker,
1983; Besley & Burgess, 2002).

Following the rapid diffusion of ICTs across the developing world, the question
of their impact on political mobilization has been the focus of an increasing number
of studies. One notable example is a study by Manacorda and Tesei (2020)
exploiting detailed georeferenced data on protest incidence and participation across
the African continent. They estimate that mobile phone coverage does increase the
probability of a protest, but only during times of economic downturn – periods
where grievances are high and the opportunity cost to participation is low. The
authors also find evidence of “strategic complementarities” in protesting, whereby
fellow community members’ participation reduces the costs and increases the
returns to one’s own participation. These appear to be enhanced by mobile
technology, which can easily publicize information on protest attendance.

Others have focused on the role of social media, a relatively new technology
whose impact on democracy has been the subject of much debate, both in developed
and developing countries. Here, Diamond (2010) cautions that technology is “open
to both noble and nefarious purposes”. For example, alongside potential reductions
of communication costs and equalizing effects, there has been much concern
surrounding their control by powerful actors and the proliferation of “fake news”
(Allcott & Gentzkow, 2017). Here, existing evidence, especially in the context of
developing countries, remains limited, though a number of studies are beginning to
uncover social media’s impact on political mobilization. For example, Enikolopov
et al (2019) study the effect of one popular social network on a wave of political
protests in 2011 Russia, using quasi-random variation in the platform’s penetration.
They detect evidence of a positive causal impact on both the incidence and size of
protests, which they argue is driven by reduction in the cost of collective action. In
another study, Acemoglu et al (2018) examine the impact of street protests in
Egypt’s Arab spring. They find that Twitter activity data is a predictor of protest
incidence, suggesting a role for social media in facilitating coordination. Finally, in
 33

China, Qin et al (2017) document a surprisingly large number of posts on China’s

Sina Weibo microblogging platform discussing politically sensitive topics and
corruption allegations, and find that the latter is predictive of future corruption
charges of specific individuals. Building further on these initial results presents an
important area for future research.

When citizens lack an effective mechanism for expressing their political

preferences, governments face weakened incentives to deliver policies that will
benefit them. This underlines the importance of both the accessibility and integrity
of elections, an area to which ICTs have also been applied. For example, Fujiwara
(2015) documents an important barrier to political participation that
disproportionately affects the most vulnerable: illiteracy. In Brazil, he describes
how this meant ballots were often erroneously completed and had to be discarded.
As a result, when an electronic system offering guidance and visual aids was
implemented in the late 90s, the author reveals that millions of citizens, particularly
those with lower levels of education, were de facto enfranchised. The implications
for both political and health outcomes are striking: the vote-share of left-wing
parties increased, which in turn translated into higher government expenditure on
healthcare and improved service utilization and outcomes. More specifically,
uneducated mothers received more prenatal visits and there was a lower incidence
of low-weight births.

In 2012, it was estimated that under 40 percent of elections in low- and middle-
income countries were free and fair, a problem often attributed to lack of
information (World Bank, 2016). Here, it has been shown that technology-enabled
monitoring stands to make an important contribution. For example, Callen and Long
(2015) study the issue aggregation fraud, where votes are altered in the process of
being added up across polling stations. In an Afghani election, they experimentally
announce a “photo quick count”, where provisional results posted at individual
stations are photographed and compared to post-aggregation figures. This was
found to provoke a 60 percent reduction in theft of election materials by candidate
representatives and a 25 percent reduction in votes for politically powerful
candidates. In Callen et al (2016), the authors conduct an experiment to evaluate a
similar photo technology in a Ugandan election. They detect similar evidence of
reduced illegal practices and a fall in the vote share for the incumbent. Together,
these studies make clear that photo quick counts can be a simple yet effective
method of improving electoral integrity, which the authors furthermore emphasize
are well-suited to being scaled via citizen-based implementation as mobile access
expands. Relatedly, Aker et al (2017) study use of SMS messaging for the reporting
of electoral irregularities in Mozambique, detecting a 5 percent increase in political
participation as a result. These results underline the potential of ICTs to empower
citizens in reinforcing the accountability of vital democratic processes.
34

Political participation and electoral integrity are the backbone of a functioning

democracy. Research in economics has documented how these have often fallen
short in developing countries, particularly in ways that disproportionately hurt the
most vulnerable. The studies discussed above have highlighted some important
successes in terms of how technologies have been harnessed to tackle these
problems, which in the case of Fujiwara (2015) translated into tangible impacts on
political outcomes and household welfare. However, we are left with a number of
important unanswered questions, especially as regards their long-run effectiveness.
In particular, the use of ICTs to enhance political engagement and improve election
monitoring will only be effective insofar as these cannot be subverted by powerful
interests.

7. Health

In developing countries, access to healthcare is still a major problem faced by a

large share of the poor, especially in rural areas. This constrains both living
standards and productive capacity. Technology may offer solutions to both sides of
the problem by expanding access to quality healthcare.

7.1 Improving the quality and delivery of healthcare services

For centuries, landmark innovations in health technology have generated drastic

improvements in living standards and life expectancies, which in turn enhance the
stock of human capital. In this way, they are vital to economic development.
However, there remain vast global inequalities in health, with at least half the
world’s population still lacking access to essential health services (WHO, 2017). In
developing countries, households experience worse access to immunization,
professional birth attendants and contraception, and suffer disproportionately from
HIV, malaria, pollution-related diseases and unsafe drinking water (Landrigan et al,
2018; UN, 2019). Overcoming these disparities is at the heart of Sustainable
Development Goal (SDG) 3, to “ensure healthy lives and promote well-being for
all at all ages”, as well as SDG6, to “ensure availability and sustainable management
of water and sanitation for all” (UN, 2020).

Health technologies targeting issues from which poor populations suffer

disproportionately are vital in the fight against global health inequality. One such
example is soil-transmitted helminth infections or worms, with a quarter of the
world’s population estimated to be at risk (Landrigan et al, 2018). In their landmark
paper, Kremer and Miguel (2004) evaluate a program in which Kenyan primary
 35

school students were experimentally administered de-worming drugs. They detect

substantial health benefits and reductions in school absenteeism, effects which also
spilled over to the non-treated. A decade later, Baird et al (2016) estimate significant
long-run impacts. In particular, men that had been treated as boys were found to
work an additional 2.5 hours per week and spend more time in non-agricultural self-
employment and were more likely to work in manufacturing. Similarly, women
were more likely to have attended secondary school and worked more in non-
agricultural self-employment and growing cash crops, rather than in traditional
agriculture. Together, these studies indicate a link between healthcare technologies
and the welfare improvements and transition out of agriculture that are intrinsic to
our understanding of development.

Other studies have focused on health technologies for combatting malaria, a

leading cause of death in the developing world that is both curable and preventable
(WHO, 2019). For example, Bleakley (2010) studies anti-malaria campaigns in the
US in the early 20th century and in Brazil, Colombia and Mexico in the mid-20th
century, made possible by critical scientific discoveries. These provoked significant
declines in the incidence of the disease. Moreover, the author finds that cohorts
more exposed to eradication efforts as children had higher literacy and incomes in
their adult lives, which he attributes to a positive effect on labor productivity. Lucas
(2010) also examines malaria eradication campaigns in his study of Paraguay and
Sri Lanka, which effectively eliminated malaria in both countries. The author
estimates that this in turn had a positive effect on educational attainment and literacy
in both countries.

Despite many successful efforts to eradicate malaria and worms, these and other
critical health problems remain endemic in certain parts of the world. In the case of
malaria, 2018 saw an estimated 228 million cases worldwide, with almost 85
percent of the global burden concentrated in just 19 countries in sub-Saharan Africa
and India (WHO, 2019). In order to generate further progress, it is clear that more
investment in the dissemination of medications and insecticides, public health and
hygiene and health education will be required. What remains unclear, however, is
whether applications of new technologies such as ICTs can support these vital
functions.

Optimism regarding the application of ICTs to improve the efficiency and quality
of health provision has been particularly strong in the case of rural areas, where
existing services are most limited. For example, Lemay et al (2012) study a small-
scale intervention in which an SMS-based mobile network was established between
community health workers (CHWs) in rural Malawi. They report improved
information sharing between CHWs and district staff, for example allowing them
to report stockouts, ask medical questions and manage emergency cases. In another
study of rural Guatemala, Martinez et al (2018) evaluate a smartphone application
designed for supporting traditional birth attendants as they examined patients. These
36

care providers are heavily relied upon by local communities but typically have
limited support and linkage with public hospitals. The application was found to
increase referral rates for pregnancy and childbirth complications. These positive
initial results suggest that ICTs’ proven benefits for enhancing connectivity and
information in markets might be equally crucial for healthcare services.

Use of drones for the delivery of medical products, such as blood, vaccines and
insulin, represents another flagship example of technology’s potential for improving
healthcare provision. The company spearheading these efforts is Zipline, who in
2016 established the world’s first and only national scale commercial medical drone
delivery service in Rwanda, a country whose geography is notoriously hard to
navigate (McCall, 2019). In 2019, Zipline delivered over 65 percent of Rwanda’s
blood supply outside of the capital (Robotics and Automation News, 2019).

Health technologies are also being used to deal with emerging challenges related
to the COVID-19 outbreak. This includes use of drones in the distribution of
medical supplies, a service Zipline plans to offer (Zipline, 2020), as well as to
broadcast social distancing regulations and monitor people’s compliance, as has
been carried out in Rwanda and India (Uwiringiyimana, 2020; Jamkhandikar,
2020). Furthermore, ICT applications are enabling virtual doctors’ appointments
and the dissemination of COVID-related information, for example in mass
government text messages (Flood, 2020). ICTs will also be vital in global efforts to
track the virus’s spread, echoing their use in Sierra Leone during the Ebola outbreak
(O’Donovan & Bersin, 2015).

Overall, we have much to thank health technology for in terms of the life
expectancies we enjoy today. Their harnessing to tackle the health problems
suffered disproportionately in developing regions is also helping to slowly chip
away at the vast inequalities in health outcomes that persist between countries.
Research in economics has furthermore demonstrated the presence of knock-on
effects these can have on education, incomes and welfare. It is widely accepted that
further progress will hinge on basic investments into public health and sanitation
infrastructures and proven health technologies. However, much less is known about
the potential contribution that applications of new technologies, such as ICTs, can
make to these efforts. Indeed, Sundin et al (2016) document that most of these
initiatives fail to progress beyond the pilot stage, but emphasize the importance of
social and economic factors over technological ones. For example, they describe
how health-related mobile phone applications have been limited by patient’s
inability to charge their phones. As such, they argue that health technologies must
be supported by thorough knowledge of socio-cultural dynamics and business
practices in order to be able to effectively scale.
 37

8. Conclusion

Development and growth are fundamentally about the spread of innovations and
ideas. In this chapter, we reviewed a range of areas of work which can help to
enhance this spread. A key insight that we have gleaned is that the same ingenuity
that has driven human progress since time immemorial will also be required to
tackle the externalities that have been engendered by that progress.

Development engineering is fundamentally about harnessing innovations and

bringing them to bear on development challenges, but that is not where the subject
stops. Indeed, much of the value of recent work is concerned with how alliances
between technologists, engineers, economists and policymakers can enable the
design of interventions that work at scale in developing countries in particular. This
is easier said than done as there is often a tougher and more complex set of
constraints to be overcome in scaling technological innovation in developing versus
developed countries. These are not just related to the way markets work, but also to
some fundamental barriers associated with the design of regulations and the way
that political and other institutions work. In this sense, development engineering is
truly a field that bridges between science and social science.

The types of challenges that are being faced in developing countries are not only
large in magnitude, but they are also extremely urgent. There are close a billion
people in extreme poverty and close to a billion without electricity, with nearly all
growth in energy demand over the next few decades expected to stem from
developing countries (Wolfram et al, 2017). With extremely young populations
there is the challenge of how millions of young women and men will find
meaningful work (Alfonsi et al 2020). There also exists a wealth of unanswered
questions regarding the relationship between growth and the environmental
damages that accompany it, with evidence that these may be more acute in the
world’s poorer regions (Burgess et al, 2017; Greenstone & Jack, 2015). If we are
serious about eliminating extreme poverty by 2030 and about shielding more
vulnerable populations from the effects of climate change, pollution and the like,
then we cannot sit on our hands.

This chapter has begun to point to some areas where technology can play a
critical role in addressing these major development challenges which are enshrined
in the SDGs, but it is still just a start. In many ways, it is more of a call to arms for
a diverse set of actors from the private sector, civil society, academia and
government to come together to maximize the positive role that different
technologies can play in the process of development. Only in this way can we
generate the innovations and productivity improvements needed to keep humans on
a path to higher living standards while ensuring that negative externalities generated
by this growth do not block the path to progress.
38
 39

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