Commitment and Regulatory Independence in Practice in Latin American and Caribbean Countries

34 Pages Posted: 21 Feb 2014

See all articles by Miguel A. Montoya

Miguel A. Montoya

Instituto Tecnológico de Estudios Superiores de Monterrey

Francesc Trillas

Autonomous University of Barcelona - Department of Economics; University of Navarra - IESE Business School

Date Written: February 19, 2014

Abstract

We present an analysis of the evolution of regulatory independence in practice for 23 Latin American and Caribbean countries in the telecommunications industry. Based on this analysis, we construct indices of regulatory independence, which improve upon the measures that have been used so far in the empirical regulation literature. Our measures are consistent with the fact that legal independence does not solve, but it relocates, the commitment problem of utility regulation. We show that legal indices may give a partially distorted picture of the commitment ability of institutions. In addition, treating independence as exogenous may underestimate its impact. The combination of de facto and de jure independence has a positive (probably modest nonetheless) impact on network penetration in telecommunications markets.

Keywords: regulation, independence, strategic delegation, telecommunications

JEL Classification: L51

Suggested Citation

Montoya, Miguel A. and Trillas Jané, Francesc, Commitment and Regulatory Independence in Practice in Latin American and Caribbean Countries (February 19, 2014). Available at SSRN: https://ssrn.com/abstract=2398513 or http://dx.doi.org/10.2139/ssrn.2398513

Miguel A. Montoya (Contact Author)

Instituto Tecnológico de Estudios Superiores de Monterrey ( email )

Av. General Ramón Corona No.2514
Zapopan, Jalisco, 45201
Mexico
523336693000 (Phone)

HOME PAGE: http://www.itesm.mx/wps/wcm/connect/Campus/GDA/Guadalajara/

Francesc Trillas Jané

Autonomous University of Barcelona - Department of Economics ( email )

Avda. Diagonal 690
Barcelona, 08034
Spain

University of Navarra - IESE Business School

Avenida Pearson 21
Barcelona, 08034
Spain

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