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Of Carts and Horses: Regulation and Privatization in Telecommunications Reforms

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  • Scott Wallsten

Abstract

In the early 1990s, many advocated quick privatization of state‐owned monopolies in developing countries, assuming that market institutions would develop once firms were privately owned. More recent thinking emphasizes establishing institutions conducive to promoting competition before privatization. To date little empirical work has informed the debate. This paper addresses this gap by testing whether establishing a regulatory authority prior to privatizing incumbent telecommunications firms matters. I find that countries that established regulatory authorities prior to privatization saw increased telecom investment and telephone penetration compared to countries that did not. Moreover, investors paid more for telecom firms in countries that established a regulator prior to privatization.

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  • 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.
  • Handle: RePEc:taf:jpolrf:v:6:y:2003:i:4:p:217-231
    DOI: 10.1080/134841280410001698987
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    Cited by:

    1. Moshi, Goodiel & Mitomo, Hitoshi, 2014. "Political stability, regulation and investment in the African mobile markets," 25th European Regional ITS Conference, Brussels 2014 101430, International Telecommunications Society (ITS).
    2. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2009. "Utilities reforms and corruption in developing countries," Utilities Policy, Elsevier, vol. 17(2), pages 191-202, June.
    3. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01164199, HAL.
    4. repec:ebl:ecbull:v:12:y:2008:i:30:p:1-10 is not listed on IDEAS
    5. Hulisi Ögüt & Asunur Cezar & Merve Güven, 2015. "An Empirical Analysis of Demand for Mobile Services in Turkey," Working Papers 937, Economic Research Forum, revised Sep 2015.
    6. Antonio Estache & Ana Goicoechea & Marco Manacorda, 2006. "Telecommunications Reform and Performance – A Global View," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(03), pages 16-21, October.
    7. Maiorano, F. & Stern, J., 2007. "Institutions and investment in low and middle-income countries: the case of mobile communications," Working Papers 07/06, Department of Economics, City University London.
    8. Antonio Estache & Ana Goicoechea & Marco Manacorda, 2006. "Telecommunications Reform and Performance – A Global View," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(3), pages 16-21, October.
    9. Maiorano, Federica & Stern, Jon, 2007. "Institutions and telecommunications infrastructure in low and middle-income countries: The case of mobile telephony," Utilities Policy, Elsevier, vol. 15(3), pages 165-181, September.
    10. Doganoglu, Toker & Grzybowski, Lukasz, 2007. "Estimating network effects in mobile telephony in Germany," Information Economics and Policy, Elsevier, vol. 19(1), pages 65-79, March.
    11. 'Ofa, Siope Vakataki, 2009. "The WTO's telecommunications commitments and the credibility of telecommunications regulatory reforms in small island developing states," MPRA Paper 66184, University Library of Munich, Germany.
    12. Filippo Belloc & Antonio Nicita & Pier Luigi Parcu, 2011. "Deregulating Telecommunications in Europe: Timing, Path-Dependency, and Institutional Complementarities," RSCAS Working Papers 2011/47, European University Institute.
    13. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Post-Print halshs-01164199, HAL.
    14. Karamti, Chiraz, 2019. "Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model," Telecommunications Policy, Elsevier, vol. 43(3), pages 238-261.
    15. Paolo Piselli & Carla Scaglioni, 2014. "Regulation Performance and Investment in Telecommunications in the European Union: a policy evaluation approach," Working Papers Department of Economics 2014/19, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    16. repec:ces:ifodic:v:4:y:2006:i:3:p:14567469 is not listed on IDEAS
    17. Estache, Antonio & Goicoechea, Ana & Manacorda, Marco, 2006. "Telecommunications performance, reforms, and governance," Policy Research Working Paper Series 3822, The World Bank.
    18. Sang Lee, 2008. "Market liberalization and ownership status of incumbent telecom enterprises: global evidence from the telecom sector," Economics Bulletin, AccessEcon, vol. 12(30), pages 1-10.
    19. Bagdadioglu, Necmiddin & Cetinkaya, Murat, 2010. "Sequencing in telecommunications reform: A review of the Turkish case," Telecommunications Policy, Elsevier, vol. 34(11), pages 726-735, December.

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