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The determinants and impact of telecommunications reforms in developing countries

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  • Gasmi, Farid
  • Recuero Virto, Laura

Abstract

This paper has two related objectives. First, it seeks to identify the key determinants of some policies that have been at the heart of the reforms of the telecommunications industry in developing countries, namely, liberalization, privatization, and the (re)structuring of regulation. Second, it attempts to estimate the extent to which these policies have translated into actual deployment of telecommunications infrastructure. This simultaneous investigation is conducted by means of an econometric analysis of a 1985-1999 time-series-cross-sectional database on 86 developing countries. Sectoral as well as institutional and financial factors are found to be important determinants of the actual reforms implemented. We uncover a positive relationship between the decision to introduce competition in the digital cellular segment and the growth of the fixed-line segment, suggesting that these two segments have benefited from each other. We also find that countries facing increasing institutional risk and financial constraints are more likely to introduce competition in the digital cellular segment and to privatize the fixed-line incumbent, these policies being economically attractive to both investors and governments. In turn, these policies are those that enhance the deployment of fixed-line infrastructure. In contrast, competition in the analogue cellular segment and the creation of a separate regulator seem to be relatively less attractive policies as they are found to be less likely to be introduced in countries facing increasing institutional risk and budget constraints. Their impact on fixed network deployment is found to be negative or non significant.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 93 (2010)
Issue (Month): 2 (November)
Pages: 275-286

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Handle: RePEc:eee:deveco:v:93:y:2010:i:2:p:275-286

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Web page: http://www.elsevier.com/locate/devec

Related research

Keywords: Telecommunications reforms institutional risk financial constraints developing countries;

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References

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Citations

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Cited by:
  1. Erdogdu, E., 2012. "The political economy of electricity market liberalization: a cross-country approach," Cambridge Working Papers in Economics 1227, Faculty of Economics, University of Cambridge.
  2. Gasmi, Farid & Maingard, Alexis & Noumba Um, Paul & Recuero Virto, Laura, 2011. "Empirical evidence on the impact of privatization of fixed-line operators on telecommunications performance - Comparing OECD, Latin American, and African countries," TSE Working Papers 11-241, Toulouse School of Economics (TSE).
  3. Borchert, Ingo & Gootiiz, Batshur & Grover, Arti & Mattoo, Aaditya, 2012. "Landlocked or policy locked ? how services trade protection deepens economic isolation," Policy Research Working Paper Series 5942, The World Bank.
  4. Berg, Sanford V & Jiang, Liangliang & Lin, Chen, 2011. "Regulation and corporate corruption: new evidence from the telecom sector," MPRA Paper 32947, University Library of Munich, Germany.
  5. Ba, Lika & Gasmi, Farid, 2011. "To what extent do infrastructure and financial sectors reforms interplay? Evidence from panel data on the power sector in developing countries," TSE Working Papers 11-264, Toulouse School of Economics (TSE).
  6. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
  7. Ba, Lika & Gasmi, Farid, 2011. "To what extent do infrastructure and financial sectors reforms interplay? Evidence from panel data on the power sector in developing countries," IDEI Working Papers 692, Institut d'Économie Industrielle (IDEI), Toulouse.
  8. Gugler, Klaus & Rammerstorfer, Margarethe & Schmitt, Stephan, 2013. "Ownership unbundling and investment in electricity markets — A cross country study," Energy Economics, Elsevier, vol. 40(C), pages 702-713.

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