Communication Economics and Development by Meheroo Jussawalla and D.M. Lamberton (Eds.)

By Meheroo Jussawalla and D.M. Lamberton (Eds.)

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The modern technology, with its sophisticated p r o d u c t s , d i s t r i b u t e s the lion's share of incomes to profit e a r n e r s and to the small, employed labor aristocracy. These groups in t u r n provide the market for the high-technology p r o d u c t s , make the investment profitable, and constitute vested i n t e r e s t s for its perpetuation. Inequality is both the result and the cause of the misapplied high technology. In these ways, the small s h a r e of 2 percent of total world R&D that poor countries spend on R&D is (through the i n t e r nal brain drain) r e n d e r e d less productive than it otherwise would b e , and the large share of 98 percent is either i r r e l e vant or harmful.

While s u c h a s t r a t e g y h a s a t t r a c t i o n s for some c o u n t r i e s f a c e d w i t h labor s u r p l u s e s and foreign e x c h a n g e s h o r t a g e s , and poorly e n d o w e d w i t h n a t u r a l r e s o u r c e s , t h e p o t e n t i a l g a i n s may n o t b e c o n s i d e r e d w o r t h t h e social r i s k s a n d social c o s t s , i n c l u d i n g a form of d e p e n d e n c e a n d of d u a l i s t i c d e v e l o p m e n t , t h a t t h e y b r i n g with them.

As a r e s u l t , the recipient government will be in a weak position vis a vis the investing firm when it comes to laying down terms and conditions. Excessive "prices" paid by recipient governments for capital equipment or imported components and technologies inappropriate from the country's point of view, or for acceptance of excessively onerous conditions, must therefore be the rule r a t h e r than the exception in a market where information embodied in equipment is bought by ignorant b u y e r s .

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