Research Spotlight: In Africa, cell phone boom can’t mask development needs

Addis Ababa, EthiopiaSMU economist Isaac Mbiti has seen in his native Kenya how cell phone use in Africa is booming. Some say it will transform the continent. However, Mbiti’s latest research reveals that cell phones alone can’t drive development. Still critical is a regulatory environment to foster use, plus roads, water, electricity and education.

The fast-growing use of cell phones in Africa, where many people lack the basic human necessities, has made headlines worldwide the past few years. The surprising boom has led to widespread speculation – and hope – that cell phones could potentially transform the impoverished continent.

But new research by Mbiti and Tufts University economist Jenny C. Aker finds that cell phones, while a useful and powerful tool for many people in Africa, cannot drive economic development on their own.

Mbiti and Aker say that while there is evidence of positive micro-economic impacts, so far there’s limited evidence that mobile phones have led to macro-economic improvements in African countries.

Cell phones can do only so much, say the researchers. Many Africans still struggle in poverty and still lack reliable electricity, clean drinking water, education or access to roads.

“It’s really great for a farmer to find out the price of beans in the market,” says Mbiti. “But if a farmer can’t get the beans to market because there is no road, the information doesn’t really help. Cell phones can’t replace things you need from development, like roads and running water.”

Mbiti and Aker will publish their findings in the article “Mobile Phones and Economic Development in Africa” in the Journal of Economic Perspectives. The Washington, D.C.-based Center for Global Development, an independent nonprofit policy research organization, has published a working version of the paper online.

To really have an impact, say Mbiti and Aker, the cell phone boom requires complementary access to public infrastructure, such as reliable electricity. “Also needed are appropriate policies and regulations that can promote the development of innovative mobile phone-based applications such as mobile banking services that have the potential to positively impact the economic livelihood of Africans,” Mbiti says.

The researchers also cite areas where more research is needed, such as the number of direct and indirect jobs created by the cell phone industry; whether mobile phones actually drive increases in gross domestic product; accurate mobile phone penetration rates; and whether cell phones are driving consumer surpluses due to increased market competition.

Written by Margaret Allen

Above, a neighborhood in Addis Ababa, Ethiopia.

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For the Record: March 19, 2010

Peter Moore, ad interim dean of Dedman College and professor of mathematics, has been elected to membership in Phi Beta Kappa by the SMU (Gamma of Texas) chapter of the honor society, which recognizes and advocates excellence in the liberal arts and sciences. Moore is the first administrator to be so honored in SMU chapter history. He was chosen for the distinction because of “his firm commitment to liberal studies and scholarship, the values crucial to intellectual life in academe,” says Associate Professor of English Bonnie Wheeler, a member of Phi Beta Kappa’s national nominating committee.

Isaac Mbiti, Economics, Dedman College, has been named a Martin Luther King Visiting Professor at the Massachusetts Institute of Technology for the 2010-11 academic year and will teach and conduct research through the Abdul Latif Jameel Poverty Action Lab in MIT’s Economics Department. The lab seeks to change the way public policy is made by determining the most cost-effective approaches for tackling poverty.

Angela Ards, English, Dedman College, has been named a 2010-11 Fellow to the Radcliffe Institute for Advanced Study. The Fellowship will allow her to research and write, with access to the Harvard and Radcliffe library resources, and to exchange ideas with a multidisciplinary community of Fellows from the humanities, the social sciences and the creative arts.

SMU’s Maguire Center for Ethics and Public Responsibility has announced the recipients of its 2010-11 Maguire Teaching Fellow Awards. Soraya Gollop, Philosophy, Dedman College, will design a course tentatively entitled “Medical Ethics.” Thomas Siems, Engineering Management, Information and Systems, Lyle School of Engineering, will design a course entitled “Ethics in Engineering.” The Maguire Center offers one or more $3,000 grants every year to professors who develop a new course relating to ethics, or who add an ethical dimension to an existing course.

Research Spotlight: Race and unemployment during recession

Unemployment trendPast research on the U.S. labor market has shown that unemployment rates of African Americans have not only been substantially higher than those of whites over the past four decades, but that these differences have been amplified during recessions. But the extent to which these differences reflect unobserved skill and productivity – or factors such as discrimination – remains a matter of debate. Isaac Mbiti, assistant professor of economics in SMU’s Dedman College of Humanities and Sciences, proposes the use of wages earned in the previous year as a measure of a worker’s skill and productivity. With co-author Yusuf Soner Baskaya, he has used the Current Population Survey March Supplement and the National Longitudinal Survey of Youth, in each year from 1976 to 2003, to compare the employment outcomes of black and white workers who earned the same wage in the previous year. Their results have provided important data on the sources of black-white differences in employment outcomes. Learn more about Mbiti’s research in development and labor economics at his website.