What Can We Learn From Comparative Institutional Analysis? The Case of Telecommunications

Charles Blankart and GÜnter Knieps

Kyklos, 1989, vol. 42, issue 4, 579-598

Abstract: In the paper several reasons will be investigated why there is only partial deregulation in Germany and extensive deregulation in the U. S. Purely economic reasons such as economies of scale are shown to be of little help for understanding telecommunications policy in Germany as compared to the U. S. As an alternative, a politico‐economic approach is presented. It is shown that institutional differences can help to understand the differences in deregulatory policy. In Germany, decisions on telecommunications deregulation are centralized on the federal level, whereas they are distributed on the federal and state level in the U. S. As consequence, a different interest group representation is prevailing in each country promoting deregulation in the U. S. and impeding deregulation in Germany. It is shown that the obstacles to deregulation in Germany might be overcome through an explicit compensation scheme embodying an entry tax on the one hand a price subsidy on the other.

Date: 1989
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