Assessing Cost Effectiveness of Digital Development Projects

Posted: 6 Aug 2019 Last revised: 16 Nov 2020

See all articles by Sharada Srinivasan

Sharada Srinivasan

The World Bank Group; University of Pennsylvania Carey Law School

Muge Haseki

University of Pennsylvania

Christopher S. Yoo

University of Pennsylvania Carey Law School; University of Pennsylvania - Annenberg School for Communication; University of Pennsylvania - School of Engineering and Applied Science

Date Written: August 5, 2019

Abstract

There is scant data on the effectiveness of different digital development projects that seek to connect and serve underserved communities. This stymies data-driven decision-making: absence of comparative cost-effectiveness analysis hampers key funding decisions by grant-making organizations and local governments in developing country environments, and can impact right-sizing of funding opportunities to project needs. This remains as true of demand-side initiatives that seek to deploy digital skills training, or supply-side initiatives using a myriad of technologies to connect the unconnected.

This paper makes headway on this problem by providing costs, reach, and simple metrics of cost-effectiveness in the form of cost/beneficiary/year incurred by different digital development projects. Using a first-of-its-kind dataset hand collected through in-depth interviews conducted with project practitioners, we report on the costs and reach across different demand- and supply-side initiatives seeking to connect the unconnected. Our contribution is unique, in that it seeks to collect and compare different connectivity initiatives across a range of domains: education, health, and agriculture; as well as standalone grassroots connectivity initiatives in the form of community networks and small scale rural ISP deployments.

The contribution of this paper is two-fold: first, we report on original costs and reach data on several projects through in-depth interviews, providing costs for a field where even order of magnitude estimates are hard to procure. Second, as changes to underlying assumptions can widely vary cost-effectiveness estimates, and these assumptions are rarely discussed in the literature for their relative strengths and weaknesses, this paper seeks to also report on a meta- analysis of cost effectiveness measures as used in various literatures in development and healthcare particularly, and use those learnings for developing cost effectiveness measures for digital development initiatives.

We report costs of projects in terms of fixed and operational costs, as well as development, management, and implementation costs in different development domains. We then provide purchasing-power-parity and real-dollar estimates of completed and ongoing projects by per beneficiary and per year costs. In instances where revenue estimates are available, we compute return on investment and time to break even using different discounting assumptions. We additionally conduct sensitivity analysis on our assumptions for discount rates for ongoing projects. A key finding in collection of this dataset has been that 2/3rd of the projects that we study do not have a revenue model, when both supply-side and demand-side projects are taken together for analysis.

Keywords: cost effectiveness, digital development

Suggested Citation

Srinivasan, Sharada and Haseki, Muge and Yoo, Christopher S., Assessing Cost Effectiveness of Digital Development Projects (August 5, 2019). TPRC47: The 47th Research Conference on Communication, Information and Internet Policy 2019, Available at SSRN: https://ssrn.com/abstract=3432677

Sharada Srinivasan (Contact Author)

The World Bank Group ( email )

1818 H Street, NW
Washington, DC 20433
United States

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

Muge Haseki

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Christopher S. Yoo

University of Pennsylvania Carey Law School ( email )

3501 Sansom St.
Philadelphia, PA 19104-6204
United States
(215) 746-8772 (Phone)

HOME PAGE: http://www.law.upenn.edu/faculty/csyoo/

University of Pennsylvania - Annenberg School for Communication ( email )

3620 Walnut St.
Philadelphia, PA 19104-6220
United States
(215) 746-8772 (Phone)

University of Pennsylvania - School of Engineering and Applied Science ( email )

3330 Walnut St.
Philadelphia, PA 19104-6309
United States
(215) 746-8772 (Phone)

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