Conflicting national policies: The creation of the euro and the rebalancing of telecommunications prices

Joan Calzada and Luis Diaz-Serrano

Telecommunications Policy, 2023, vol. 47, issue 1

Abstract: Government departments have diverse interests, and on certain occasions, the need to achieve a priority objective in one department may lead to the adoption of inefficient policies in other areas, with long-lasting consequences. In this paper, we analyze the rebalancing of the telecommunications tariffs that took place in the European Union before and after the liberalization of the market in 1998. We show that the objective of satisfying the Maastricht inflation condition to allow participation in the European Monetary Union from 1999 led some national governments to block the rebalancing of telecommunications tariffs. Specifically, we demonstrate that in the years immediately before the liberalization of the telecommunications market, those countries that faced greater difficulty achieving the inflation objectives of the Maastricht Treaty reduced, rather than increased, the prices of local telephone calls and line rental. Furthermore, these countries did not intensify efforts to rebalance their tariffs after the creation of the euro. Our paper also shows that in this period the countries that diverged most from the inflation condition invested less in their telecommunications infrastructure.

Keywords: Liberalization; Prices; Inflation; European Union; Euro (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0308596122001604
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Conflicting National Policies: The Creation of the Euro and the Rebalancing of Telecommunications Prices (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:47:y:2023:i:1:s0308596122001604

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
http://www.elsevier. ... /30471/bibliographic

DOI: 10.1016/j.telpol.2022.102458

Access Statistics for this article

Telecommunications Policy is currently edited by Erik Bohlin

More articles in Telecommunications Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().