Regulatory Governance in African Telecommunications: Testing the Resource Curse Hypothesis
20 Pages Posted: 23 Jan 2012
Date Written: September 25, 2011
This paper examines regulatory governance in the context of African telecommunications. Though there is already a substantial literature devoted to the regulatory practices in developing countries, it generally conceptualizes the quality of regulation as an exogenous policy variable that affects the performance of the telecommunications sector or treats it as a normative recommendation to improve performance.
This paper approaches the quality of governance from a different perspective. Understanding how the degree of regulatory governance might be related to the structural characteristics of a developing economy will provide new insights into what factors should be adopted in order to increase effective regulation. It applies to telecommunications the theory known in development economics as the paradox of plenty or the resource curse, by which countries richly endowed with natural resources lag behind in the development of governance institutions. We therefore expect an inverse correlation between natural resource dependence and the quality of regulatory governance in telecommunications.
To develop an index of regulatory governance, we use a meta-analytic procedure based on previously published indices of governance quality in telecommunications. This index value is then compared to several measures of natural resource dependence in 53 African countries. The results indicate that, contrary to the predictions of the resource curse hypothesis, highly resource dependent countries tend to have moderate levels of regulatory governance, while resource poor countries display a much wider range of regulatory quality.
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