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Telecommunications privatization and tariff rebalancing: evidence from Latin America

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  • Ros, Agustin J.
  • Banerjee, Aniruddha
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    Abstract

    Using panel data on 23 countries, we find a positive and statistically significant relationship between privatization and network expansion and efficiency in the Latin American region. We also find that excess demand for basic service is strongly and negatively related to tariff rebalancing, suggesting that an increase in residential service prices can mitigate unmet demand for basic service in the Latin American region by, in the long run, increasing the supply of main lines. According to our results, a 10 percent increase from the average residential price in Latin America is likely to reduce unmet demand by approximately 4.1 percent. Finally, we find that privatization is negatively related to unmet demand. In particular, privatization reduces unmet demand by approximately 28 percent. This indicates that, even after controlling for tariff rebalancing, there are concrete efficiency gains from privatization.

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    Bibliographic Info

    Article provided by Elsevier in its journal Telecommunications Policy.

    Volume (Year): 24 (2000)
    Issue (Month): 3 (April)
    Pages: 233-252

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    Handle: RePEc:eee:telpol:v:24:y:2000:i:3:p:233-252

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    Keywords: Telecommunications Privatization Tariff rebalancing;

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    Cited by:
    1. Paleologos, John M. & Polemis, Michael L., 2013. "What drives investment in the telecommunications sector? Some lessons from the OECD countries," Economic Modelling, Elsevier, vol. 31(C), pages 49-57.
    2. Gasmi, Farid & Recuero Virto, Laura, 2010. "The determinants and impact of telecommunications reforms in developing countries," Journal of Development Economics, Elsevier, vol. 93(2), pages 275-286, November.
    3. Parker, David & Kirkpatrick, Colin, 2003. "Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons," Centre on Regulation and Competition (CRC) Working papers 30623, University of Manchester, Institute for Development Policy and Management (IDPM).
    4. Jeffrey Bernstein & Juan Hernandez & Jose Rodriguez & Agustin Ros, 2006. "X-Factor updating and total factor productivity growth: the case of peruvian telecommunications, 1996–2003," Journal of Regulatory Economics, Springer, vol. 30(3), pages 316-342, November.
    5. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany.
    6. Farid Gasmi & Paul Noumba Um & Laura Recuero Virto, 2009. "Political Accountability and Regulatory Performance in Infrastructure Industries: An Empirical Analysis," World Bank Economic Review, World Bank Group, vol. 23(3), pages 509-531, October.
    7. Gasmi, F. & Maingard, A. & Noumba, P. & Recuero Virto, L., 2013. "The Privatization of the Fixed-Line Telecommunications Operator in OECD, Latin America, Asia, and Africa: One Size Does Not Fit All," World Development, Elsevier, vol. 45(C), pages 189-208.
    8. Carlo Maria Rossotto & Bjorn Wellenius & Anat Lewin & Carlos R. Gomez, 2004. "Competition in International Voice Communications," World Bank Publications, The World Bank, number 14855, February.
    9. Andres, Luis & Foster, Vivien & Guasch, Jose Luis, 2006. "The impact of privatization on the performance of the infrastructure sector : the case of electricity distribution in Latin American countries," Policy Research Working Paper Series 3936, The World Bank.
    10. Montoya, Miguel A. & Trillas, Francesc, 2007. "The measurement of the independence of telecommunications regulatory agencies in Latin America and the Caribbean," Utilities Policy, Elsevier, vol. 15(3), pages 182-190, September.
    11. Luis A. Andrés & J. Luis Guasch & Thomas Haven & Vivien Foster, 2008. "The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road Ahead," World Bank Publications, The World Bank, number 6545, February.
    12. Katharina Gassner & Alexander Popov & Nataliya Pushak, 2009. "Does Private Sector Participation Improve Performance in Electricity and Water Distribution?," World Bank Publications, The World Bank, number 6605, February.

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