4.3. The Two-Gap “Economic” Model
Rural telecommunication economists look at the urban-rural access divide in developing countries as a series of gaps. More specifically, the literature refers to a two-gap model, as illustrated in Figure 2.
Figure 2: Two-Gap Model
Source: Uganda Communications Commission, 2005.(2)
These two gaps are the market efficiency gap and the access gap.The market efficiency gap is the difference between what markets actually achieve under existing conditions and what they can achieve if market barriers are removed. Establishing an enabling policy and regulatory environment (including effective competition, private sector provision of services, and market-oriented policies and regulations that create a level playing field, particularly for new entrants) is the best way to close this market efficiency gap.
The access gap refers to people and places that remain beyond the limits of the market due to inadequate income levels or skewed income distribution. Public investment is likely to be required to close the access gap and make it possible for rural operators to become active in these areas.(3)What the two-gap model suggests is that there are areas, characterized by a combination of poverty and geographic isolation, that will require government and/or donor intervention to ensure provision of telecommunication services—until the market evolves. In areas where the private sector can provide services, the government should ensure that the policy and regulatory environment encourages rather than inhibits private sector investments. The government might also want to use policy tools to assure that some equity goals are met within the context of commercial viability. In many cases, as was mentioned before, we are using telecommunications both as a tool, and as a case in point for the way that capacity development requirements can be met in ways that support the development objectives at the same time. The provision of connectivity can be simultaneously a driver for development, a source of employment, and a catalyst for community development.
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