IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Telecommunications liberalization and regulatory governance: lessons from Latin America

  • Gutierrez, Luis H.
  • Berg, Sanford

The role of the state changed in Latin American and Caribbean countries between 1985 and 1995 as eight regulatory commissions were created (for the 19 countries in our regional sample). This institutional innovation was part of the liberalization process that has permeated the hemisphere. This study examines the determinants of telephone lines per capita, using economic, institutional and regulatory variables. Lacking information on total investment, we use lines as a proxy for telecommunications investment. The economic variables have the expected impacts. Gross domestic product (GDP) per capita affects investment in a positive way: telecommunications services are income-elastic. Openness (exports plus imports as a percentage of GDP) captures significant external links which require telecommunications to coordinate the production and delivery of goods and services. This variable had a positive (but not statistically significant) impact. Similarly, greater population density was a significant determinant of lines per capita for this particular sample of countries (reflecting lower cost of service for urban areas). Building on the work of Levy and Spiller (Regulations, Institutions, and Commitment: Comparative Studies of Telecommunications, Cambridge University Press, New York, 1996), we introduce institutional indices to capture the effects of political democracy, economic freedom, and a sound regulatory framework. The latter captures the degree of independence of the regulatory body, enforcement powers, neutrality, and mechanisms for resolving conflicts. It might be viewed as a proxy for serious reform initiatives (including reduction of entry barriers and privatization). The regulatory framework and freedom factors have significant positive impacts on telephone lines per capita. Another important explanatory variable is the number of cellular phones per capita. The positive impact is consistent with cellular being a complement for fixed line telephony. Alternatively, the positive impact could reflect a "competition effect" whereby competitive entrants in a liberalized sector stimulate improved performance (and additional investment) by incumbent wire-line firms.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0308596100000690
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 24 (2000)
Issue (Month): 10-11 (November)
Pages: 865-884

as
in new window

Handle: RePEc:eee:telpol:v:24:y:2000:i:10-11:p:865-884
Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description

Order Information: Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:24:y:2000:i:10-11:p:865-884. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.