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The Role of Institutional Design in the Conduct of Infrastructure Industry Reforms - An Illustration through Telecommunications in Developing Countries

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  • Recuero Virto, Laura
  • Gasmi, Farid
  • Noumba Um, Paul

Abstract

This paper is concerned with the role of political and economic institutions in the conduct of the infrastructure industries reform process in developing countries. Our point of departure is that the specific features of these countries' economies should be accounted for when considering policy design. We discuss the main results and policy lessons drawn from two studies of the telecommunications sector based on an econometric analysis of time-series-cross-sectional data on developed and developing countries. We synthesise the main empirical findings and policy implications pertaining to two issues. The first issue concerns the impact of the quality of institutions on the function of regulation. Our review points to the fact that political accountability of institutional systems is a key determinant of regulatory performance, in particular in developing countries. The second issue relates to the factors that shape the sectoral reforms themselves and the impact of these reforms on the development of the industry in developing countries. Our main conclusion is that countries' institutional risk and financial constraints are among the major factors that explain which reforms are actually implemented.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 28253.

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Date of creation: 2008
Date of revision: 2008
Handle: RePEc:pra:mprapa:28253

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Related research

Keywords: Political accountability; reforms; infrastructure industries; developing countries;

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References

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  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  3. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2003. "An assessment of telecommunications reform in developing countries," Information Economics and Policy, Elsevier, vol. 15(4), pages 443-466, December.
  4. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  5. Gasmi, Farid & Noumba Um, Paul & Virto, Laura Recuero, 2006. "Political accountability and regulatory performance in infrastructure industries : an empirical analysis," Policy Research Working Paper Series 4101, The World Bank.
  6. Gasmi, F. & Laffont, J. J. & Sharkey, W. W., 2000. "Competition, universal service and telecommunications policy in developing countries," Information Economics and Policy, Elsevier, vol. 12(3), pages 221-248, September.
  7. Mariano Tommasi & Pablo T. Spiller, 2004. "The Institutions of Regulation," Working Papers 67, Universidad de San Andres, Departamento de Economia, revised Mar 2004.
  8. Joanne Evans & Paul Levine & Fransesc Trillas, 2006. "Lobbies, Delegation and the Under-investment Problem in Regulation," School of Economics Discussion Papers 2006, School of Economics, University of Surrey.
  9. Gutierrez, Luis Hernando, 2003. "The Effect of Endogenous Regulation on Telecommunications Expansion and Efficiency in Latin America," Journal of Regulatory Economics, Springer, vol. 23(3), pages 257-86, May.
  10. Emerson, Patrick M., 2006. "Corruption, competition and democracy," Journal of Development Economics, Elsevier, vol. 81(1), pages 193-212, October.
  11. Stern, Jon & Cubbin, John, 2005. "Regulatory effectiveness : the impact of regulation and regulatory governance arrangements on electricity industry outcomes," Policy Research Working Paper Series 3536, The World Bank.
  12. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany.
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