1. ICTs, Poverty and Livelihoods
Session 5
“ICTs for Development” course
Aim – to understand how ICTs can help eradicate poverty
Objectives – participants will be able to:
- Explain the intention of poverty eradication as a development goal
- Categorise the relationship between ICTs and financial poverty eradication
- Summarise evidence on the relationship between ICTs and financial poverty eradication
- Outline the sustainable livelihoods framework
- Overview evidence on the relation between ICTs and sustainable livelihoods
- Explain the impact of ICTs on gender equality
5.1. Poverty Eradication as a Development Goal
ASK - how would you define poverty?
>Draw out notions of absolute and relative poverty

2. Numbers Below National Poverty Line
Absolute poverty still a real problem: c.2 billion living on <US$3.10 per day; 800 million on <US$1.90 per day. Economic growth can help address: see China’s experience.
Data source: WB 2015

3. Gini Coefficients
Relative poverty still a real problem. E.g. measure via Gini coefficient – higher means worse inequality.
Data source: WB 2015

4. Growth vs. Change in Inequality
This graph has economic growth as the Y axis; and decline in economic inequality as the X axis
ASK - what does this graph show is the relation between change in inequality and economic growth?
>No relationship
Graph is global North and specific Gini definition but matches wider evidence that economic growth alone will not address inequality and relative poverty
So need specific measures, beyond general growth, to address poverty including specific uses of ICTs
Data source: Tom 2014

5. Household Income vs. Internet Access in South Africa
Social Divisions
Household Income vs. Internet Access in South Africa
5.2. ICTs and Financial Poverty
EXERCISE
What does this graph tell us?
>Relation between ICT access and income
But which way does the relation run?
>Both ways: higher income leads to spending more on ICTs; but what of the other way around?
Data source: Oyedemi 2012

6. ICT Causal Impact on Poverty
Households in Peru using the internet earned an average 19% more than similar households which did not use the internet (de los Rios 2010).
Access to broadband in Ecuador increased household annual income by 5% (Katz & Callorda 2013).
“with every one unit increase of ICT access, one sees a 3.7 % improvement in one’s poverty status from 2007 to 2008 and 2010 in four Eastern African countries” (May & Diga 2015:98).
ASK – what does this evidence suggest?
>There is some poverty-reduction effect of ICTs
Can divide into four areas: getting, saving, making, and spending money.

7. Financial Poverty: Getting Money
ICT-Enabled Communication
Family Remittances
AirtimeTransfers
Formal Cash Transfers
Getting Money
Two main ways the poor are given money – remittances from family members; cash transfers from governments or aid programmes.
EXERCISE
Read Box 5.1 case study. Do m-money systems help users get given additional money?
>Yes: see direct remittance increase; indirect gain from journey substitution; wider impact on shocks
Mobile Money

8. ICTs and Savings
“there is evidence that these [m-money] accounts were used to accumulate small balances that may be indicative of savings” (Blumenstock et al 2015).
Controlling for other factors like income, education and wider community use of mobile money, use of the M-Pesa system was found to make it 20% more likely for individuals to report savings (Demombynes & Thegeya 2012).
Even if people don’t save more, they save differently, holding their savings on the mobile money system rather than in the riskier form of physical cash: women in Kenya described this as a way to keep their “secret savings” safe from their husbands (Morawczyski 2009).
Saving Money
ASK – What learned in last session as a key way in which ICTs help the poor save money?
>Journey substitution
But saving money can also mean accumulating money to buy assets, education, emergency needs.
ASK – What does slide evidence suggest?
>ICTs enable savings

9. The Growing M-Finance Infrastructure
Prior evidence is at D and I levels of DIRT. Reorganisation would mean financial inclusion e.g. access to financial services: not just money transfer but payments, savings, loans, insurance, etc.
EXERCISE
What benefits can digital financial ecosystem inclusion bring? Read text at end of Section to find out.
>See impacts on earnings, credit record, loans, relations with institutions
>So ICTs helping the poor to save money
Source: ©GSMA in Muthiora 2015

10. Making Money With ICTs Role / Application Intensive Extensive
Entrepreneur
a) Improving income for a traditional enterprise
c) Creating or improving an ICT sector enterprise
Employee
b) Getting a new or better traditional job
d) Getting a new or better ICT sector job
Making Money
Reminder from previous session of difference between intensive and extensive uses of ICTs (see Section text).
Combine with two roles: working for yourself vs. working for someone else.
Process a) discussed in previous session.
Process b) covers how ICTs can help you get a traditional job.
ASK - how can ICTs help get traditional job?
>See Section text
Processes c) and d) are a continuum within the ICT sector, which does include the poor.

11. Base-of-the-Pyramid ICT Jobs
EXERCISE: What are the benefits and risks of an ‘extensive’/ICT sector job for the poor?
Grameen “Phone Ladies”:
IT Impact Sourcing:
Examples of ICT sector livelihoods for more marginalised groups.
EXERCISE
From watching the videos: what are the benefits and risks of an ‘extensive’/ICT sector job for the poor?
>See Section text for benefit and risk overview
Read Section text on intensive vs. extensive ways of making money. Which has a bigger impact?
>If 95:5 is correct, they have equal impact. But do current programmes and policies recognise this?

12. Relative Expenditure on Mobile
Spending Money
ASK – do poor people spend a higher or lower percentage of their income on ICTs than rich people do?
>Much higher: see Section examples of how the poor divert expenditure into ICTs
EXERCISE
Are the costs of ICTs worth the benefits for the poor? Read text in Section
>Evidence both ways but may need to disentangle financial, economic and social benefits
Data source: Aguero et al 2011

13. The Sustainable Livelihoods Framework
5.3. ICTs and Livelihoods
Income measures of poverty relate only to effects but May (2012) definition (see Section 5.3 text) also relates to means of earning a living.
To understand this, can use the Sustainable Livelihoods Framework (SLF).
Use Section 5.3 text to explain the components of the SLF.
Will now look at some of these and the relation to ICTs.
Source: DFID 1999

14. ICTs and Emergency Shocks
Before -> During -> After
Vulnerability Context
ASK
How can ICTs help before, during and after an external shock?
>Relate to examples in Section text
Image source:

15. Social Capital 5.3.2. Livelihoods Assets
Covering most assets in earlier or later sessions but here look at ICTs and social capital (SK).
Use Section text to explain bonding, bridging and linking social capital.
Main issue for the poor: strong on bonding; weak on other types. How do ICTs help?
DISCUSSION
Reflect on your own experience. Looking at the three types of social capital, what has been the impact of your use of ICTs? Has it improved, harmed or made no difference?:
>Does experience match evidence that easier to reinforce existing SK than create new, easier to create bonding than other types?
Source: Meier 2012

16. Transforming Structures and Processes
Positive evidence around ICTs and vulnerability context, assets, livelihood strategies.
But incremental not transformative: where is impact on wider structures and processes of society?
Example of such structures/processes are those of gender inequality.
EXERCISE
Read Box 5.10 example: are ICTs changing the wider structures and processes of gender inequality?
>See Section text: positive incremental impacts for women, but little evidence of transformative impact on patriarchal structures.
>Implications for complementary actions, and critical awareness.
Image source:© Marc Shoul / Panos at