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Does political accountability matter for infrastructure regulation? The case of telecommunications

  • Recuero Virto, Laura
  • Gasmi, Farid
  • Noumba Um, Paul

This paper discusses the link between political accountability, regarded as an important aspect of institutional design, and infrastructure regulation that has been emphasized in the recent literature on the role of institutions in economic development. We report on the findings and lessons drawn from an analysis of telecommunications data covering the period 1985-1999 on two sets of countries; one composed of 29 developing countries and another of 23 developed countries. The main point highlighted by the analysis is that infrastructure regulation in a given country cannot be independent of the institutional environment, in particular, the degree of political accountability that supports the country’s institutions. The argument is demonstrated by means of an econometric estimation of dynamic panel data models that shows evidence of a significant effect of pro- political accountability factors on regulatory performance as reflected in measures of sector output and efficiency. Expectedly enough, this effect is found to be more pronounced in the developing countries data set. A key policy implication of this result is that efforts to enhance institutional quality and support politically accountable systems in developing countries should yield large benefits for infrastructure regulation.

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File URL: https://mpra.ub.uni-muenchen.de/28496/1/MPRA_paper_28496.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 28496.

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Date of creation: 2010
Date of revision: 2010
Handle: RePEc:pra:mprapa:28496
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  1. Correa, Paulo & Melo, Marcus & Mueller, Bernardo & Pereira, Carlos, 2008. "Regulatory governance in Brazilian infrastructure industries," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 202-216, May.
  2. Ashley C. Brown & Jon Stern & Bernard Tenenbaum, 2006. "Handbook for Evaluating Infrastructure Regulatory Systems," World Bank Publications, The World Bank, number 7030, November.
  3. Laffont,Jean-Jacques, 2005. "Regulation and Development," Cambridge Books, Cambridge University Press, number 9780521549486, Junio.
  4. Gasmi, Farid & Noumba Um, Paul & Virto, Laura Recuero, 2006. "Political accountability and regulatory performance in infrastructure industries : an empirical analysis," Policy Research Working Paper Series 4101, The World Bank.
  5. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  6. repec:reg:rpubli:194 is not listed on IDEAS
  7. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," Journal of Law, Economics and Organization, Oxford University Press, vol. 3(2), pages 243-77, Fall.
  8. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  9. Gutierrez, Luis H., 2003. "Regulatory governance in the Latin American telecommunications sector," Utilities Policy, Elsevier, vol. 11(4), pages 225-240, December.
  10. Levy, Brian & Spiller, Pablo T, 1994. "The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation," Journal of Law, Economics and Organization, Oxford University Press, vol. 10(2), pages 201-46, October.
  11. Mariano Tommasi & Pablo T. Spiller, 2004. "The Institutions of Regulation," Working Papers 67, Universidad de San Andres, Departamento de Economia, revised Mar 2004.
  12. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  13. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  14. William B. Heller & Mathew D. McCubbins, 1996. "Politics, institutions, and outcomes: Electricity regulation in Argentina and Chile," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(4), pages 357-387.
  15. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany.
  16. Cubbin, John & Stern, John, 2005. "Regulatory effectiveness and the empirical impact of variations in regulatory governance - electricity industry capacity and efficiency in developing countries," Policy Research Working Paper Series 3535, The World Bank.
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