IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v24y2000i10-11p865-884.html
   My bibliography  Save this article

Telecommunications liberalization and regulatory governance: lessons from Latin America

Author

Listed:
  • Gutierrez, Luis H.
  • Berg, Sanford

Abstract

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.

Suggested Citation

  • Gutierrez, Luis H. & Berg, Sanford, 2000. "Telecommunications liberalization and regulatory governance: lessons from Latin America," Telecommunications Policy, Elsevier, vol. 24(10-11), pages 865-884, November.
  • Handle: RePEc:eee:telpol:v:24:y:2000:i:10-11:p:865-884
    as

    Download full text from publisher

    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 search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.