The Impact of ICT Expenditures on Institutionalized Democracy and Foreign Direct Investment in Developing Countries

The impacts of ICT expenditures on developing countries are examined by relying on theories of adaptive structuration, global and local adaptation, and network society. Local adaptation to globalization is addressed through an empirical analysis of both the economic and political subsystems of developing countries. Least-squares regression models are used to investigate the impact of ICT expenditures on institutionalized democracy and foreign direct investment over a five-year period following the initial expenditures. ICT expenditures are shown to have a strong positive impact on future levels of foreign direct investment, as well as on future levels of institutionalized democracy in developing countries. The level of institutionalized democracy is also shown to mediate the impact of ICT expenditures on foreign direct investment. The implications of these findings for policy-makers are presented and discussed.