An Assessment of Telecommunications Reform in Developing Countries

37 Pages Posted: 20 Apr 2016

See all articles by Carsten Fink

Carsten Fink

World Bank - Development Research Group (DECRG)

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Randeep Rathindran

World Bank

Date Written: October 2002

Abstract

Fink, Mattoo, and Rathindran analyze the effect of policy reform in basic telecommunications on sectoral performance using a new panel data set for 86 developing countries across Africa, Asia, the Middle East, and Latin America and the Caribbean over the period 1985 to 1999. The authors address three questions:

• What impact do specific policy changes - relating to ownership and competition - have on sectoral performance?

• How is the impact of change in any one policy affected by the implementation of the other, and by the overall regulatory framework?

• Does the sequence in which reforms are implemented affect performance?

The authors find that both privatization and competition lead to significant improvements in performance. But a comprehensive reform program, involving both policies and the support of an independent regulator, produced the largest gains - an 8 percent higher level of mainlines and a 21 percent higher level of productivity compared to years of partial and no reform. Interestingly, the sequence of reform matters: mainline penetration is lower if competition is introduced after privatization, rather than at the same time. The authors also find that autonomous factors, such as technological progress, have a strong influence on telecommunications performance, accounting for an 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. This research is supported in part by a grant from the United Kingdom Department for International Development.

Suggested Citation

Fink, Carsten and Mattoo, Aaditya and Rathindran, Randeep, An Assessment of Telecommunications Reform in Developing Countries (October 2002). World Bank Policy Research Working Paper No. 2909. Available at SSRN: https://ssrn.com/abstract=636272

Carsten Fink (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
Room MC 3-327
Washington, DC 20433
United States
202-458-8047 (Phone)
202-676-9810 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/amattoo

Randeep Rathindran

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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