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Telecommunications privatization and tariff rebalancing: evidence from Latin America

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  • Ros, Agustin J.
  • Banerjee, Aniruddha

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.

Suggested Citation

  • Ros, Agustin J. & Banerjee, Aniruddha, 2000. "Telecommunications privatization and tariff rebalancing: evidence from Latin America," Telecommunications Policy, Elsevier, vol. 24(3), pages 233-252, April.
  • Handle: RePEc:eee:telpol:v:24:y:2000:i:3:p:233-252
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    Cited by:

    1. 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, July.
    2. Ramos, Boris & Saeed, Khalid & Pavlov, Oleg, 2010. "The impact of Universal Service Obligations and International Cross-subsidies on the dispersion of telephone services in developing countries," Socio-Economic Planning Sciences, Elsevier, vol. 44(2), pages 57-72, June.
    3. David Parker & Colin Kirkpatrick, 2005. "Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons," Journal of Development Studies, Taylor & Francis Journals, vol. 41(4), pages 513-541.
    4. 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.
    5. repec:idb:idbbks:358 is not listed on IDEAS
    6. 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.
    7. Jeffrey Bernstein & Juan Hernandez & Jose Rodriguez & Agustin Ros, 2007. "X-factor updating and total factor productivity growth: the case of peruvian telecommunications, 1996–2003," Journal of Regulatory Economics, Springer, vol. 31(3), pages 355-355, June.
    8. 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.
    9. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany.
    10. Gasmi, Farid & Maingard, Alexis & Noumba Um, Paul & Recuero Virto, Laura, 2011. "Empirical evidence on the impact of privatization of fixed-line operators on telecommunications performance - Comparing OECD, Latin American, and African countries," TSE Working Papers 11-241, Toulouse School of Economics (TSE).
    11. 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.
    12. Carlo Maria Rossotto & Bjorn Wellenius & Anat Lewin & Carlos R. Gomez, 2004. "Competition in International Voice Communications," World Bank Publications, The World Bank, number 14855, July.
    13. 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.
    14. Symeou, Pavlos C. & Pollitt, Michael G., 2014. "Fixed voice telephony in economies of different sizes: When industry policy meets technological change," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 273-286.
    15. Vivien Foster & José Luis Guasch & Luis Andrés & Thomas Haven, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 59818, February.
    16. 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, July.
    17. 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.

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