Rethinking poverty: An econometric analysis of the role of ICT poverty in a global context

Abstract

In an age of increasing digitalization, it is imperative for policymakers and researchers to grasp the profound impact of Information and Communication Technologies (ICTs) on poverty. This paper investigates the relationship between ICT poverty and the absolute poverty index across the Global South and North from 2012 to 2022. Furthermore, it assesses the influence of ICT poverty on the risk of poverty or social exclusion in various geographic areas—cities, suburbs/towns, and rural regions—across 28 European countries. Employing a range of panel models, such as fixed/random effects and the Generalized Method of Moments (GMM), the study uncovers significant positive associations between ICT poverty and absolute poverty and the risk of poverty or social exclusion across all geographic areas. Our research indicates that policies aimed at reducing ICT inequality—commonly known as the “digital divide"—are more effective in alleviating poverty than those solely focused on promoting ICT development. Additionally, the study introduces a new policy framework, the ICTs-PGI Triangle, which offers a roadmap for policymakers to mitigate ICT poverty in both the Global South and North. The empirical results highlight the importance of providing equitable digital access and literacy, particularly in rural and marginalized areas, for sustainable poverty reduction. Therefore, this study provides valuable insights into the intricate interplay between digitalization and poverty alleviation strategies, addressing a significant gap in the current literature.