Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization

37 Pages Posted: 28 Jul 2012  

Thomas W. Hazlett

Clemson University

Giancarlo Ibarguen

Francisco Marroquin University

Wayne A. Leighton

Francisco Marroquin University

Multiple version iconThere are 2 versions of this paper

Date Written: August 15, 2006

Abstract

In most countries, wireless communications rely on administrative allocation of radio spectrum. The inefficiencies associated with this centralized approach have led economists, starting with Coase in 1959, to suggest 'propertyzing' radio spectrum. Critics of this approach assert that property rights impose prohibitive transaction costs and inhibit development of wireless services. Reforms enacted in Guatemala (in 1996) and El Salvador (in 1997) have largely implemented policies suggested by Coase, yielding a natural experiment. Evidence generated in the mobile telephone market suggests that these regimes are associated with a relatively high degree of competitiveness, and correspondingly high rates of deployment, while appearing to avoid high transaction costs in the public or private sectors. We conclude that these liberal reforms tend to produce results consistent with Coase’s policy conjecture.

Keywords: spectrum allocation, telecommunications policy, wireless technology, mobile phone competition, property rights, transaction costs

JEL Classification: D85, L96, O54, P14, Q29

Suggested Citation

Hazlett, Thomas W. and Ibarguen, Giancarlo and Leighton, Wayne A., Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization (August 15, 2006). TPRC 2006. Available at SSRN: https://ssrn.com/abstract=2118321

Thomas W. Hazlett (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563430 (Phone)
8646564192 (Fax)

HOME PAGE: http://hazlett.people.clemson.edu/

Giancarlo Ibarguen

Francisco Marroquin University ( email )

6 calle final, zona 10
Guatemala City, 01010
Guatemala

Wayne A. Leighton

Francisco Marroquin University ( email )

6 calle final, zona 10
Guatemala City, 01010
Guatemala

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