Does the mobile phone affect social development? Evidence from Indonesian villages

This paper analyses the impact of Information and Communication Technology (ICT) on social development in Indonesian Villages. In this study, I use data from different waves of the Indonesian Village Potential Statistics (Potensi Desa) to determine whether mobile phone signal strength affects social development indicators. The results indicate that villages with a strong signal are statistically more likely to possess the proper infrastructure programs. Furthermore, mobile phones increase the availability of village libraries and access to credit for small and medium enterprises (SMEs). Using the plausibly exogenous variation of lightning strike intensity as the instrumental variable, this study suggests that higher mobile phone signal strength is positively associated with the policies implemented by the village head and leads to better social development. As the mechanisms, this study shows that mobile phones increase the likelihood of having collective action and civic engagement, increasing villagers’ political participation and use of telecommunication services, thus leading to an increase in village government’s accountability.