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Regulating telecommunications in developing countries : outcomes, incentives, and commitment

Author

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  • Galal, Ahmed
  • Nauriyal, Bharat

Abstract

In response to the recent wave ofprivatizing and regulating monopolies in developing countries, the authors evaluate the impact of different regulatory schemes on private sector behavior in the telecommunications sector in seven countries. They find that regulation is most effective - meaning, it results in substantial investment by the private sector, reasonable returns on this investment, and greater productivity - where the government/regulators reduce the firm's information advantage, induce the firm (through pricing) to operate efficiently, and institute safeguarding mechanisms to protect the firm against expropriation of assets or quasi-rents. Conversely, where the government/regulators fail to resolve information, incentive, and commitment problems, private sector returns are relatively high, and investment and productivity are relatively low.

Suggested Citation

  • Galal, Ahmed & Nauriyal, Bharat, 1995. "Regulating telecommunications in developing countries : outcomes, incentives, and commitment," Policy Research Working Paper Series 1520, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1520
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ian Alexander & Antonio Estache, 2000. "Industry restructuring and regulation: Building a base for sustainable growth - lessons from Latin America," Development Southern Africa, Taylor & Francis Journals, vol. 17(3), pages 307-337.
    2. Anne-Marie Mohammed & Eric Strobl, 2011. "Good Governance and Growth in Developing Countries: A Case Study of Regulatory Reforms in the Telecommunications Industry," Journal of Industry, Competition and Trade, Springer, vol. 11(1), pages 91-107, March.
    3. Li, Wei & Qiang, Christine Zhen-Wei & Xu, Lixin Colin, 2005. "Regulatory Reforms in the Telecommunications Sector in Developing Countries: The Role of Democracy and Private Interests," World Development, Elsevier, vol. 33(8), pages 1307-1324, August.
    4. Siddhartha Mitra & Suman Bery & Gupta D B & Reeta Krishna, 2010. "The Nature of Rural Infrastructure: Problems and Prospects," Working Papers id:2357, eSocialSciences.
    5. 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.
    6. Patalinghug, Epictetus & Llanto, Gilberto M., 2005. "Competition Policy and Regulation in Power and Telecommunications," Discussion Papers DP 2005-18, Philippine Institute for Development Studies.
    7. Gutierrez, Luis H., 2003. "Regulatory governance in the Latin American telecommunications sector," Utilities Policy, Elsevier, vol. 11(4), pages 225-240, December.
    8. Zhang, Yinfang & Parker, David & Kirkpatrick, Colin, 2005. "Competition, regulation and privatisation of electricity generation in developing countries: does the sequencing of the reforms matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 358-379, May.
    9. Rossana Achterberg, 2000. "Competition policy and regulation: A case study of telecommunications," Development Southern Africa, Taylor & Francis Journals, vol. 17(3), pages 357-371.

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