A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence regarding the limited impact of past `information revolutions' on least developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from those opportunities that the Internet does present---they lack the physical and human capital, along with the institutions required to exploit the e-economy. Finally, even more optimistic forecasts of the Internet's global economic impact are small in scale compared to the challenge of development. This has some significant implications for development policy.

This paper discusses East Asia’s performance in terms of per capita GDP growth rates over the past forty years and compares that performance to progress primarily on measures of health. It also compares the region to the rest of the World on a set of broader development measures. It looks at the evidence of East Asian regional and global convergence in health and education, alongside evidence from the region matching global evidence of a comparatively weak link between income growth and health and education growth. This finding is echoed by available within-country evidence from the region. The paper discusses what might be behind these results, suggesting the importance of a few simple supply-side interventions coupled with the spread of demand for health and education services as sufficient to drive quality of life convergence.

A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence regarding the limited impact of past ‘information revolutions ’ on least developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from those opportunities that the Internet does present—they lack the physical and human capital, along with the institutions required to exploit the e-economy. Finally, even more optimistic forecasts of the Internet’s global economic impact are small in scale compared to the challenge of development. This has some significant implications for development policy.