1. The determinants and impact of telecommunications reforms in developing countries
- Author
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Gasmi, Farid and Virto, Laura Recuero
- Subjects
Developing countries -- Analysis ,Telecommunication -- Laws, regulations and rules ,Telecommunication -- Analysis ,Government communications regulation ,Business ,Economics - Abstract
To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jdeveco.2009.09.012 Byline: Farid Gasmi (a), Laura Recuero Virto (b) Keywords: Telecommunications; reforms; institutional risk; financial constraints; developing countries Abstract: This paper has two related objectives. First, it seeks to identify the key determinants of some policies that have been at the heart of the reforms of the telecommunications industry in developing countries, namely, liberalization, privatization, and the (re)structuring of regulation. Second, it attempts to estimate the extent to which these policies have translated into actual deployment of telecommunications infrastructure. This simultaneous investigation is conducted by means of an econometric analysis of a 1985-1999 time-series-cross-sectional database on 86 developing countries. Sectoral as well as institutional and financial factors are found to be important determinants of the actual reforms implemented. We uncover a positive relationship between the decision to introduce competition in the digital cellular segment and the growth of the fixed-line segment, suggesting that these two segments have benefited from each other. We also find that countries facing increasing institutional risk and financial constraints are more likely to introduce competition in the digital cellular segment and to privatize the fixed-line incumbent, these policies being economically attractive to both investors and governments. In turn, these policies are those that enhance the deployment of fixed-line infrastructure. In contrast, competition in the analogue cellular segment and the creation of a separate regulator seem to be relatively less attractive policies as they are found to be less likely to be introduced in countries facing increasing institutional risk and budget constraints. Their impact on fixed network deployment is found to be negative or non significant. Author Affiliation: (a) Toulouse School of Economics (ARQADE & IDEI), Universite Toulouse 1 Capitole, France (b) Organisation for Economic Co-operation and Development, France Article History: Received 19 July 2008; Revised 26 September 2009; Accepted 30 September 2009 Article Note: (footnote) [star] An earlier version of this paper was presented at the ASSET meeting, Padua, Italy, November 2007, the ADRES meeting, Toulouse, France, January 2008, the meeting of the Royal Economic Society, University College of London, UK, January 2008, and the ISNIE meeting, Toronto, Canada, June 2008. We thank participants to these events for useful comments. We are indebted to E. Auriol, L.H. Gutierrez, R. McNary, R. Rathindran, S. Wallsten, and L.C. Xu for their help in the construction of the database used in this paper, and to D. Filmer for providing some software. We thank T. Magnac, M. Traore, the editor of this journal, and two anonymous referees for useful comments. Supplemental material to this paper is available from the authors upon request. All remaining errors are ours only, however.
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- 2010