Giving a voice to the poor : rural telephones and economic development in Peru

Abstract

Although the current literature on technology and development has mainly focused on the Internet, I focus on a case where an "old" technology can be more beneficial and appropriate. In 1993, the Peruvian Government created the Telecommunications Investment Fund - FITEL, a fund aimed at providing subsidies to the private sector so that they would provide telecommunication services to remote and poor communities. FITEL's rural public telephone projects have had tremendous impacts on isolated and poor rural communities, providing an increase in welfare. The FITEL model has been replicated in many countries around the world as it has been considered successful by the literature and the development organizations. However, FITEL has also have drawn much criticism due to many problems that were unforeseen at the design phase of the projects. In this thesis we analyze how the political environment, the institutional arrangements, and the different actors affected the outcomes of the projects, providing some lessons to policy makers, especially those working on developing projects involving technology.