Stunting Economic Development south of the Mediterranean: The impact of internet censorship on e-business and e-commerce

Abstract

There is a well established negative relationship between press censorship and economic development. (Kilman) Furthermore research by the World Bank Institute has shown that the supply of information by the media can ... improve the performance of the economic system. (WBI, 2002) However this link is not so well established in regard to economic development and internet censorship. This paper will take one area within economic development - the development of e-business and e-commerce - and attempt to demonstrate that internet censorship has a negative impact on this area of economic development. Once this link has been established, it s consequences for the economic development of countries South of the Mediterranean will be discussed. There is a large body or research on the impact of censorship on e-business in Chine, which indicates that government control is negatively related to Chinese firms e-business adoption. (Kshetri, 2007) In one example, surveys conducted in Southern China indicate that the concerns of internet users about privacy and censorship are inhibiting E-commerce adoption there. (Tucker, 2003) One major cause of this is the negative affect on user trust which internet censorship causes. As trust, in general is an important factor in conducting e-transactions, which revolve around uncertainty and ambiguity (Akther, 2008) any wide-scale negative impacts on internet user trust are likely to have significant implications for e-commerce. (Hynes, 2006) In another study which compared the e-business models of India and China, internet censorship in China is seen as giving the country a comparative disadvantage to India in this regard, as India does not have a similarly elaborate censorship regime. (Li, 2008) More generally in China, government control increases e-business related costs and can be seen as acting as barriers to consumers Internet use. (Kshetri, 2007) In summarising the Chinese experience of censorship, Three key factors seem to be obstacles to the development of e-business and e-commerce. As a result censorship seems to be leading to higher costs associated e-business and e-commerce, a lower level of trust in e-business and e-commerce by internet users, and lowers levels of internet use and penetration