The Impact of ICT Investments on Human Development: A Regression Splines Analysis

Despite the worldwide growth in investments in information and communication technology (ICT), few studies have investigated the complex interactions between components of ICT investments and different dimensions of human development. The purpose of this study is to explore the conditional impacts of ICT investments (Hardware, Software, Internal Services Spending and Telecommunication) on two dimensions of Human Development (Standard of Living and Health) within three contexts (classified as High, Medium and Low income countries). To carry out the study, archival data concerning ICT investments and human development for 51 countries with the largest ICT markets were collected for the period 1994 to 2003. The study utilized a novel approach called regression splines to analyse the data. Results suggest, among other things, that: (1) the impact of investments in the different ICT components varies with context; (2) impacts are in many cases conditional and complex; and (3) the direction of impacts of ICT investment on Standard of Living may be different from the corresponding directions of impacts on Health. It is therefore necessary for policy makers or IS executives to do in-depth tradeoff analysis between the different components of ICT investment to determine appropriate allocations.