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Regulating telecommunications in developing countries : outcomes, incentives, and commitment

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  • Galal, Ahmed
  • Nauriyal, Bharat

Abstract

In response to the recent wave ofprivatizing and regulating monopolies in developing countries, the authors evaluate the impact of different regulatory schemes on private sector behavior in the telecommunications sector in seven countries. They find that regulation is most effective - meaning, it results in substantial investment by the private sector, reasonable returns on this investment, and greater productivity - where the government/regulators reduce the firm's information advantage, induce the firm (through pricing) to operate efficiently, and institute safeguarding mechanisms to protect the firm against expropriation of assets or quasi-rents. Conversely, where the government/regulators fail to resolve information, incentive, and commitment problems, private sector returns are relatively high, and investment and productivity are relatively low.

Suggested Citation

  • Galal, Ahmed & Nauriyal, Bharat, 1995. "Regulating telecommunications in developing countries : outcomes, incentives, and commitment," Policy Research Working Paper Series 1520, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1520
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    References listed on IDEAS

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    Cited by:

    1. Scott Wallsten, 2003. "Of Carts and Horses: Regulation and Privatization in Telecommunications Reforms," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(4), pages 217-231.
    2. Wallsten, Scott J., 1999. "An empirical analysis ofcompetition, privatization, and regulation in telecommunications markets in Africa and Latin America," Policy Research Working Paper Series 2136, The World Bank.
    3. Ian Alexander & Antonio Estache, 2000. "Industry restructuring and regulation: Building a base for sustainable growth - lessons from Latin America," Development Southern Africa, Taylor & Francis Journals, vol. 17(3), pages 307-337.
    4. Patalinghug, Epictetus & Llanto, Gilberto M., 2005. "Competition Policy and Regulation in Power and Telecommunications," Discussion Papers DP 2005-18, Philippine Institute for Development Studies.
    5. Anne-Marie Mohammed & Eric Strobl, 2011. "Good Governance and Growth in Developing Countries: A Case Study of Regulatory Reforms in the Telecommunications Industry," Journal of Industry, Competition and Trade, Springer, vol. 11(1), pages 91-107, March.
    6. Gutierrez, Luis H., 2003. "Regulatory governance in the Latin American telecommunications sector," Utilities Policy, Elsevier, vol. 11(4), pages 225-240, December.
    7. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    8. Li, Wei & Qiang, Christine Zhen-Wei & Xu, Lixin Colin, 2005. "Regulatory Reforms in the Telecommunications Sector in Developing Countries: The Role of Democracy and Private Interests," World Development, Elsevier, vol. 33(8), pages 1307-1324, August.
    9. Wallsten, Scott, 2002. "Does sequencing matter? regulation and privatization in telecommunications reforms," Policy Research Working Paper Series 2817, The World Bank.
    10. Suman Bery & D.B. Gupta & Reeta Krishna & Siddhartha Mitra, 2004. "The Nature of Rural Infrastructure: Problems and Prospects," NCAER Working Papers 94, National Council of Applied Economic Research.
    11. Yilmaz, Kamil, 2000. "Türk telekomünikasyon sektöründe reform: Özelleştirme, düzenleme ve serbestleşme [Reform in the Turkish telecommunications sector: Privatisation, regulation, and liberalisation]," MPRA Paper 66244, University Library of Munich, Germany.
    12. Zhang, Yinfang & Parker, David & Kirkpatrick, Colin, 2005. "Competition, regulation and privatisation of electricity generation in developing countries: does the sequencing of the reforms matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 358-379, May.
    13. Rossana Achterberg, 2000. "Competition policy and regulation: A case study of telecommunications," Development Southern Africa, Taylor & Francis Journals, vol. 17(3), pages 357-371.

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