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Regulation of Telecom in Developing Countries: Outcomes, Incentives and Commitment

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  • Ahmed Galal

    (Economic Research Forum)

Abstract

In response to the recent wave of privatization and regulation of monopolies in developing countries, this paper evaluates the impact of regulation on private sector behavior in the telecommunications sector in seven countries. It shows that regulation is most effective (as evidenced by reasonable private sector returns, high private investment and improved productivity) where the government/regulators reduce the firms' information advantage, induce the firm (through pricing) to operate efficiently, and institute safeguarding mechanisms to protect the firm against expropriation of assets. Conversely, where the government/regulators fail to resolve the information, incentives and commitment problems private sector returns are relatively high, investment is relatively low and productivity is also low.

Suggested Citation

  • Ahmed Galal, 1995. "Regulation of Telecom in Developing Countries: Outcomes, Incentives and Commitment," Working Papers 9513, Economic Research Forum, revised 07 Jun 1995.
    • Handle: RePEc:erg:wpaper:9513
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    Cited by:

    1. Gutierrez, Luis H., 2003. "Regulatory governance in the Latin American telecommunications sector," Utilities Policy, Elsevier, vol. 11(4), pages 225-240, December.
    2. Shirley, Mary M., 1999. "Bureaucrats in business: The roles of privatization versus corporatization in state-owned enterprise reform," World Development, Elsevier, vol. 27(1), pages 115-136, January.
    3. Ahmed Farouk Ghoneim, 2003. "Helping to Identify The Potential and Mode For Liberalization of Trade in Services in The Southern Mediterranean Countries: The Case of Egypt," Working Papers 0303, Economic Research Forum, revised 01 Feb 2003.

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