The Physical Infrastructure for Electronic Commerce in Developing Nations: Historical Trends and the Impact of Privatization

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Abstract
Telecommunications infrastructure is the physical foundation for electronic commerce (EC). This infrastructure has historically been inadequate in developing nations, limiting their participation in EC both domestically and globally. Recognizing the consequences of these inadequacies, many developing nations have recently implemented policy reforms in this sector, with the general objective of increasing private-sector participation. However, the improvements in different components of telecommunications infrastructure have not been uniform, and vary across countries. We first examine historical data from twenty-three countries over a twenty-three-year period (1972–94) to catalog inadequacies in basic infrastructure compared with industrialized nations. We then analyze data on sector reform in seven developing countries, identifying improvements in basic service, mobile cellular, paging, and other infrastructure components. The impact of reform is quantified, and the analysis suggests how privatization efforts might be sequenced and targeted to improve EC infrastructure in developing countries.

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