An assessment of telecommunications reform in developing countries

Abstract

Fink, Mattoo, and Rathindran analyze the effect ofThe authors find that both privatization and policy reform in basic telecommunications on sectoral competition lead to significant improvements in performance using a new panel data set for 86 performance. But a comprehensive reform program, developing countries across Africa, Asia, the Middle East, involving both policies and the support of an and Latin America and the Caribbean over the period independent regulator, produced the largest gains-an 1985 to 1999. The authors address three questions: 8 percent higher level of mainlines and a 21 percent o What impact do specific policy changes-relating to higher level of productivity compared to years of partial ownership and competition-have on sectoral and no reform. Interestingly, the sequence of reform performance?matters: mainline penetration is lower if competition is o How is the impact of change in any one policy introduced after privatization, rather than at the same affected by the implementation of the other, and by the time. The authors also find that autonomous factors, overall regulatory framework? such as technological progress, have a strong influence -Does the sequence in which reforms are on telecommunications performance, accounting for an implemented affect performance? increase of 5 percent a year in teledensity and 9 percent in productivity over the period 1985 to 1999.This paper-a product of Trade, Development Research Group-is part of a larger effort in the group to improve our understanding of services reform.

The determinants and impact of telecommunications reforms in developing countries

“…Gutierrez (2003) reports a reduction of unmet demand of the order of 10 to 18% in data on 22 Latin American countries covering the period 1980-1997. Similar results are obtained by Fink et al (2002), Ros (2003), and Li and Xu (2004) using various data sets.…”

“…The importance of this issue is highlighted by Wallsten (2001) and Gutierrez (2003) who find that privatization coupled with the existence of an independent regulator results in larger gains in terms of network expansion. Fink et al (2002) and Ros (2003) also find that the impact of privatization and competition reforms is enhanced by the creation of a separate regulator. As to the impact of privatization on efficiency, it is found that it is similarly affected by the presence of an independent regulator (Wallsten, 2001, Gutierrez, 2003.…”

“…In particular, the bulk of this literature has come to the conclusion that the introduction of competition has resulted in measurable network deployment and labor efficiency in the fixed-line seg-ment. Fink et al (2002) provide an analysis of the impact of competition on fixed-line deployment and labor efficiency in data on 86 developing countries across African, Asian, Middle Eastern, Latin American, and Caribbean countries for the period 1985. Wallsten (2001, Gutierrez (2003), and Ros (2003) use data on a set of African and Latin American countries while Ros (1999) uses data on countries with GDP per capita of less than USD 10,000 and McNary (2001) and Li and Xu (2004) use worldwide data.…”

“…Wallsten (2001, Gutierrez (2003), and Ros (2003) use data on a set of African and Latin American countries while Ros (1999) uses data on countries with GDP per capita of less than USD 10,000 and McNary (2001) and Li and Xu (2004) use worldwide data. Though McNary (2001), Fink et al (2002), and Li and Xu (2004) consider the introduction of competition in the fixed-line and cellular segments, to the best of our knowledge, the analogue and digital segments have yet to be addressed separately. This paper is an attempt to do so.…”

“…The data set constructed for this study contains observations for the period 1985-1999 on the following list of 86 developing countries: (Ros, 1999, Bortolotti et al, 2001, McNary, 2001, Fink et al, 2002, Ros, 2003, and Li and Xu, 2004.…”