"A well known example is the finding in 2005 by Leonard Waverman, of the London Business School, an extra 10 mobile phones per 100 people in a typical developing country leads to an additional 0.59 percentage points of growth in GDP per person."**The above is relevant to the Philippine situation as the deregulation of the Telecoms industry in the 90's resulted in the widespread adoption of mobile phones so if the same pattern is followed here, then some of the growth over the past few years could at least be attributed to FVR's Telecoms deregulation. The Waverman finding cited above states that:
"Indeed, the results suggest that long-run growth in the Philippines could be as much as 1 percent higher than in Indonesia, were the gap in mobile penetration evident in 2003 to be maintained. The Philippines had 27 mobile phones per 100 inhabitants in 2003, compared to 9 per 100 in Indonesia."While i find it easy to believe that mobile phones do contribute to economic growth by removing economic inefficiencies (e.g. fishermen not being able to go to the right fish market to sell their catch), the contention that the contribution to growth will be for the long-run will depend on whether the increase in mobile phone penetration contributes to economic growth via growth (or rate) effects or level effects. According to economist Robert Lucas***, growth effects are...
", changes in parameters that alter growth rates along balanced paths"[see diagram below]
...in which case the change in the rate of growth is expected to persist for a longer period (as depicted by the dashed portion of the blue line) while level effects are...
"changes that raise or lower balanced growth paths without affecting their slope"[see diagram below]...in which case the rate of growth will taper off sooner rather than later (as depicted by the dashed portion of the orange line). The ability to distinguish between the two effects would, among other things, help us find out for how much more longer can we benefit from telecoms (and other similar) deregulation.
Update April-17-2008: Jessica Zafra points to (and helpfully summarizes) a New York Times article on how cellphones can help eradicate poverty, which is closely related, but should not be mistaken as identical to, promoting economic growth.
*The Digital Provide: Information (technology), market performance and welfare in the South Indian fisheries sector”, by Robert Jensen. To be published in the Quarterly Journal of Economics, August 2007.
**Leonard Waverman & Geoff A. Edwards, The Effects of Public Ownership and Regulatory Independence on Regulatory Outcomes: A Study of Interconnect Rates in EU Telecommunications, January 2005
***Robert E. Lucas Jr., Lectures on Economic Growth, 2002, Harvard University Press