Digital Dreams

A few years ago, a local Internet entrepreneur was arrested in Ghana, her employees jailed and her computer equipment confiscated. Her crime? Providing consumers with a way to make low-cost telephone calls over the Internet.

That businesswoman's brush with the law typifies the main reason-aside from low incomes-that bridging the so-called "digital divide" between rich and poor countries is so difficult. It's not a lack of equipment or of local knowledge. No, a large part of the divide is a direct result of domestic policies that suppress Internet and technology use.

While we shouldn't exaggerate the Internet's benefits, it can reduce business costs, increase access to information, and create opportunities. As a result, developing countries face a stark choice: take advantage of new technologies to stimulate economic growth and enhance productivity or fall even further behind as businesses and consumers in rich countries increasingly embrace digital advances.

The threats and opportunities presented by new technologies for developing countries are widely discussed. But the ways governments in developing countries exacerbate the divide through their own regulatory policies are much less well understood.