Incorporating affordability, efficiency, and quality in the ICT development index: Implications for index building and ICT policymaking

Abstract

International Telecommunication Union’s ICT Development Index and related measures of a country’s ICT development maturity suffer from several limitations, including subjective estimation of the weights of individual indicators and sub-indices, use of inappropriate quantitative models, specification bias arising from the exclusion of potential predictors from the estimation models, and a failure to capture the disparities among different groups of countries. To overcome these problems and provide a more reliable measure of ICT development, this study develops the Modified ICT Maturity Level Index using the 2015 data of 166 countries. This index adds affordability, efficiency, and quality to the existing sub-indices of access, use, and skills. Sub-index and indicator weights are determined in an outcome-orientated way using Partial Least Squares Structural Equation Modeling. We find that affordability, quality, and efficiency significantly explain the variation in the level of maturity of ICT development in addition to the previously used dimensions of International Telecommunication Union’s ICT Development Index and modified ICT Development Index (mIDI) developed by Gerpott and Ahmadi, and that their explanatory power differ by a country’s level of economic development. The new index produces significantly different country rankings. This has important implications for ICT policy priorities and provides a measure of ICT development maturity less prone to the innocent or intentional distortion of such policy priorities.