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The Role of Web and E-Commerce in Poverty Reduction: A Framework Based on Ecological Systems Theory



Web and eCommerce enabled by easy access to Internet on mobile devices have a great potential to reduce poverty by improving access to education, health, government, financial and other services, and by providing access to potential global markets for the products and services they can offer. However, the role of Web/eCommerce in poverty reduction has not been well studied in IS research; specifically no theoretical framework for such studies exist. The purpose of this study is to develop a theoretical framework that can help identify causes of poverty and help examine how Web/eCommerce can intervene to reduce poverty. Our framework is based on Bronfenbrenner’s ecological systems theory. We apply the resulting framework to rural farming families.
The Role of Web and E-Commerce in Poverty
Reduction: Ecological Systems Theory
Dong-Heon Kwak1 and Hemant Jain2,
1 Kent State University,
2 University of Wisconsin-Milwaukee,
Abstract. Web and eCommerce enabled by easy access to Internet on mobile
devices have a great potential to reduce poverty by improving access to
education, health, government, financial and other services, and by providing
access to potential global markets for the products and services they can offer.
However, the role of Web/eCommerce in poverty reduction has not been well
studied in IS research; specifically no theoretical framework for such studies
exist. The purpose of this study is to develop a theoretical framework that can
help identify causes of poverty and help examine how Web/eCommerce can
intervene to reduce poverty. Based on Bronfenbrenner’s ecological systems
theory, we apply the resulting framework to rural farming families.
Keywords: Poverty Reduction, Ecological Systems Theory, Web, eCommerce,
1 Introduction
Poverty has been an endless concern in the human history. The complex,
multidimensional, ubiquitous nature of poverty has led researchers in various
disciplines (e.g., economics, sociology, anthropology, psychology) to identify vari ous
strategies to reduce poverty. Recently, there have been efforts by management
researchers to address the poverty issue. In particular, businesses could play an
important role in reducing poverty while making profits if they adapted their business
models to serve population at the Bottom of Pyramid [12]. Web and eCommerce
enabled by easy access to Internet through mobile devices can allow businesses to
reach remarkable new markets which consist of billions of people at lower end of
income spectrum.
Information and communication technologies (ICTs), specifically Web access and
eCommerce enabled by mobile devices, can play a significant role as enabling
technology for reducing poverty (for ease of reference we use the term ICTs to refer
to WEB access and eCommerce enabled by mobile devices). There have been many
ICT-based development projects initiated by international aid institutions (e.g., UN,
World Bank), nonprofit organizations, and educational institutions. Many researchers
regard it as critical means for helping the poor and reducing poverty. ICTs have
potential to reduce poverty by improving poor people’s access to education, health,
government, financial services, and relevant information [12, 14]. Web, for example,
D.-H. Kwak & H. Jain
can help small farmers in rural areas by connecting them to market or providing easy
access to relevant and accurate agricultural information [6].
We argue that use of ICTs for poverty reduction needs to be theoretically studied
from the academic perspective; and based on this, appropriate systems needs to be
designed, developed, implemented, used, and maintained. However, ICTs and poverty
reduction have been rarely studied in Information Systems (IS) discipline. In addition,
there is a lack of theoretical framework that can cover large number of reasons of
poverty. Given the importance of the research on the relationship between ICTs and
poverty reduction and lack of previous research in IS, the purpose of this study is to
develop a theoretical framework that identify causes of poverty and examine how
ICTs can intervene to reduce poverty. We use Bronfenbrenner’s ecological systems
theory (EST) [4] as a basis for developing our framework.
2 ICT and Poverty Reduction
ICTs are defined as technologies that can process different kinds of information
and facilitate different forms of communications among human agents, among
humans and information systems, and among information systems[7, p. 6]. This
definition is consistent with tool view of technology” suggested by Orlikowski and
Iacono [11]. Since our focus is on investigating how ICTs can alleviate poverty, the
tool view of technology is the core conceptualization of ICTs used for poverty
reduction. Adeya [1] reviews studies on how old ICTs (e.g., radio and telephone) and
new ICTs (e.g. Internet, cell phone, and computer based technologies) contribute to
poverty reduction. Kenny [10] argues that a variety of old and new ICTs can alleviate
poverty by providing analysis of costs and benefits of ICTs. Radio has been regarded
as powerful means for spreading information and educating poor people in both urban
and rural areas [1]. Studies are still being conducted on the benefits of radio in the
information age [e.g., 10]. Examples of new ICTs include computerized milk
collection centers that support small poor dairy farmers [6].
Many scholars have pointed out the positive effects of ICTs on the poor. Prahalad
[12] states that “there are now a large number of examples of organizing the poor to
ensure that they have the benefits of information-as in the case of farmers using cell
phones to check weather and price information before they sell to farming
cooperatives or working with large firms such as ITC or Nestle” (p. 23). Heeks and
Bhatnagar [8] state that ICTs for poverty reduction primarily play a role of
communication technologies rather than of information-processing or production
technologies, suggesting that access to information is a priority in helping the poor. In
addition, community information centers can help the poor in rural areas by providing
relevant information [13]. Moreover, ICTs are seen as having potential to effectively
combat pandemic such as HIV/AIDS [1].
Since poverty is a complex, multidimensional, ubiquitous phenomenon, it is not
possible for researchers to examine all causes of poverty and all types of poor people.
Thus, research to date has focused on the relationship between ICTs and poverty
reduction by selecting specific target (e.g. women in developing countries) or topic
(e.g., market access, education, health).
Role of Web and E-Commerce in Poverty Reduction
3 Theoretical Development: Ecological Systems Theory
This study employs Bronfenbrenner’s ecological systems theory (EST) to examine
causes of poverty and impact of ICTs on poverty reduction. Bronfenbrenner
developed EST in an effort to define and identify human development. According to
Bronfenbrenner [4], “The ecology of human development is the scientific study of the
progressive, mutual accommodation throughout the life course between an active,
growing human being and the changing properties of the immediate settings in which
the developing person lives. [This] process is affected by the relations between these
settings and by the larger contexts in which the settings are embedded (p. 188).
EST suggests that human development occurs through continuous, reciprocal
interactions between human beings and the individuals, objects, and symbols in the
environment [5]. The environment is comprised of five layers of systems which
interact in complex ways and has bi-directional influences within and among systems
[5]. The five systems are microsystem, mesosystem, exosystem, macrosystem, and
chronosystem. The microsystem refers to the environment which immediately affects
a person. It includes parents, peers, home, and others. The mesosystem is comprised
of interactions among two or more immediate environments. Examples of
mesosystems are relations between the child’s teacher or peer group and the parents.
Exosystem indirectly influence a person by directly influencing microsystem and
mesosystem. The school and the school board are examples of mesosystem in child
development. Macrosystem refers to the dominant social ideologies and cultural
values that partially determine the social structure and activities. The chronosystem
emphasizes the effect of time on all systems and all developmental processes,
including consistency or change over the life span.
EST provides a good framework to examine the relationship between ICTs and
poverty. Since ICTs can impact all the five systems in the EST, this theory is well
suited to examine the overall impact of ICTs on poverty. Research on poverty has
generally focused on micro or single topic. EST provides broad map which can
include micro to macro aspects of causes of poverty. In the next section we use this
framework to study the causes of poverty of farming family who live in rural areas in
developing countries. We then examine how ICTs can impact various systems related
to farming family and in turn impact poverty.
4 Environment of Poor Rural Farming Families in Developing
Countries and Impact of ICT
To identity the role of ICTs in alleviating poverty, this study focuses on farming
families living in rural areas in developing countries [14]. There are many possible
causes of poverty of farming families; in this paper we focus on the reasons that
prevent them from increasing their income and make them spend more money than
required. Based on EST framework microsystem includes factors which directly
influence poverty of rural farming families in developing countries. Microsystem
includes lack of market access, lack of skill, health problem, and lack of relevant
information. Mesosystem is interactions between microsystems which also directly
D.-H. Kwak & H. Jain
impact poor farmers. Exosystem does not directly influence farming families but it
has indirect relationships with mesosystem and microsystem that influence farmers.
Lack of institutional help and regional enterprise are examples of exosystem.
Macrosystem includes country status, infrastructure, and language problem that has
impact on the whole society.
Based on above causes of poverty with reference to EST framework, we examine
how ICTs can intervene at various levels in EST model to help poverty reduction in
the context of rural farming family. We examined and analyzed existing literature on
ICT applications in rural areas and classified those applications using the EST
framework described above. This provides a theoretical basis and deeper
understanding into how ICT applications impact poverty reduction efforts.
Table 1. ICT intervention at different levels of Ecosystems
Description [Ecosystems for Intervention]
milk collection
centers in India
Dairy Information System Kiosk software developed by Indian Institute of
Management, Ahmedabad offers useful information to farmers via a
database including complete histories of all milk cattle owned by members
of the cooperative and a dairy portal connected to the Internet. Dairy
farmers who incorporate the computerized system benefit from a more
efficient cooperative system. [Microsystem: Information access]
Auxiliary nurse
health delivery
project in India
Personal Digital Assistants (PDAs) allow auxiliary nurse midwives
(ANMs) participating in the Indian Healthcare Delivery project for
alleviating redundant paperwork and data entry, freeing up time for
healthcare delivery to poor people. PDAs facilitate data collection and
transmission, saving up to 40 percent of ANMs’ work time. This facilitates
access to basic services. [Exosystem: Institution]
Translator in
This is a part of APDIP project to develop a web-based engine that
provides the translation from English to Nepali. The program is for Nepali
speaking Internet users and other institutions. This can make additional
information available to people and institutions. [Microsystem:
Information access], [Macrosystem: Language Problem]
Flower farmer in
A flower farmer in India has reduced his workload while more than
doubling his monthly income because of better market price information
through his mobile phone. [Microsystem: Information access]
Smartphones in Uganda are helping thousands of poor farmers to track new
farming technologies, treatment for their animal, weather patterns, market
prices and best bargains. [Microsystem: Information access]
This study is one of the few studies to investigate the role of ICTs in poverty
reduction in IS discipline. This study incorporates EST which can explain individual
and societal structure simultaneously. EST proved to be useful and comprehensive
theoretical framework in examining the complex nature of poverty. Drawing upon
EST, this study investigated how ICTs can reduce poverty. The EST theoretical
framework helps classify a development project into one or more syste ms of the
framework and thus evaluate how the project can impact poverty reduction goal. We
have reviewed a number projects done in various countries and classified them based
on the framework. This shows the viability and usefulness of the framework.
Role of Web and E-Commerce in Poverty Reduction
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4. Bronfenbrenner, U.: Recent Advances in Research on Human Development. In R. K.
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Perspectives on the Ecology of Human Development, pp. 619--647. Washington, DC:
American Psychological Association (1995)
6. Cecchini, S., Scott, C.: Can Information and Communications Technology Applications
Contribute to Poverty Reduction? Lessons from Rural India. Information Technology for
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7. Chowdhury, N.: Information and Communications Technologies and IFPRI’s Mandate: A
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33 (2000)
8. Heeks, R., Bhatnagar, S.: Understanding Success and Failure in Information Age Reform.
Reinventing Government in the Information Age: International Practice in IT-Enabled Public
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9. IDRC.: Cell phones can help alleviate poverty in developing countries [video file]. Accessed on 6 March 2014 (2009)
10. Kenny, C.: The Costs and Benefits of ICTs for Direct Poverty Alleviation. The World
Bank: Washington, DC (2002)
11. Orlikowski, W.J., Iacono, C.S.: Desperately Seeking the “IT” in IT research-A call to
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