IILJ Emerging Scholars Paper 9 (2008)

Improving Access to Telecommunications in Rural Areas of Developing Countries: Consumer Cooperatives and the Millennium Challenge Corporation

Aaron J. Meyers

Read PDFRead PDF
Telecommunication services encourage economic growth and provide quality-of-life benefits such as improved health care, education, and security. Unfortunately, rural areas of developing countries remain severely underserved, due to the high cost of network expansion and rural inhabitants’ low levels of income. Community-owned rural telecommunications cooperatives provide a potential solution by decreasing initial expenses and eliminating market contracting costs. Moreover, cooperatives’ participatory nature improves sustainability and provides positive externalities with developmental benefits: cooperatives empower rural people, encourage grassroots initiatives, and promote democratization and political participation.

Nevertheless, rural cooperatives face significant challenges. Governments tend to resist necessary legislative and regulatory changes and refuse to assist with financing; cooperatives’ managers may make mistakes owing to inexperience or fail to act in the collective interest; and cooperatives’ members suffer from collective action problems which limit their influence over government and ability to monitor managers. Fortunately, the Millennium Challenge Corporation (MCC), an American foreign assistance organization, is well positioned to align the interests and enhance the abilities of these groups. By proving large quantities of coordinated funding to carefully selected countries, the MCC earns substantial bargaining leverage with recipient governments, allowing it to insist on legislative and policy changes. Further, the MCC can create national organizations in recipient countries, benefiting from the expertise of the U.S. National Telecommunications Cooperative Association. Such organizations could train managers, monitor cooperatives’ performance, and serve as a central point for members to lobby their governments, thereby overcoming rural inhabitants’ collective action problems.