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V. INSTITUTIONAL AND POLICY REQUIREMENTS FOR E-COMMERCE DEVELOPMENT

Guest post by: OECD Development Centre

Article Overview: Even assuming the physical infrastructure bottlenecks to Internet expansion are overcome and access prices become more affordable in developing countries, a number of other significant policy challenges must be met if governments are to create an environment conducive to e-commerce.

V. INSTITUTIONAL AND POLICY REQUIREMENTS FOR E-COMMERCE DEVELOPMENT

Even assuming the physical infrastructure bottlenecks to Internet expansion are
overcome and access prices become more affordable in developing countries, a number
of other significant policy challenges must be met if governments are to create an
environment conducive to e-commerce. E-commerce requires legal norms and standards
(covering, for example, contract enforcement, consumer protection, liability assignment,
privacy protection, intellectual property rights) and process and technical standards
(e.g. regarding the way payments are accepted on the Internet and products are delivered
to the final user, security, authentication, digital signatures, and connectivity protocols).
As regards Internet-related technologies, it seems virtually inevitable that many of
the norms and standards defining the e-commerce environment will be forged in the more
advanced countries. “Standing on the shoulders of giants” makes sense when network
externalities and interoperable standards are key to maximising the benefits of e-commerce
(Mann, 2000b). Besides an enabling policy environment, merchandise e-commerce also
requires complementary physical infrastructure, notably a logistics system capable of timely,
secure, and affordable small batch shipping to multiple destinations. The cost for delays
can be high even in the United States. A recent BCG study revealed that 19 per cent of
online customers said the delivery of their orders either took longer than they expected or
never occurred. As a result, many stopped shopping online, while others refused to do
more business with the offending e-tailer35.

OECD DEVELOPMENT CENTRE
Working Paper No. 164
E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES
by
Andrea Goldstein and David O’Connor

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Article Tags: 2000b, commerce environment, contract enforcement, development prospects, digital signatures, internet expansion, internet related technologies, interoperable standards, legal norms, logistics system, network externalities, oecd development centre, physical infrastructure, policy challenges, policy environment, security authentication, shoulders of giants, standing on the shoulders, standing on the shoulders of giants, user security



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