Do reforms sequences matter for telecom sector performance? Evidence from MENA countries

Carlo Cambini (), Riham Ezzat and Carine Staropoli ()
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Carlo Cambini: Polito - Politecnico di Torino = Polytechnic of Turin
Carine Staropoli: PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: Since the late eighties, governments have designed telecommunication policies aiming at introducing competition. This implies new regulation framework and privatization of State Owned Enterprises (SOEs). This paper empirically assesses the effect of reforms sequences in the telecommunications sector on the sector performance, by using a sample of 17 Middle East North African (MENA) countries for the period 1995-2010. Countries are free to choose how to proceed notably whether to establish an Independent Regulatory Authority (IRA) before or after privatizing the SOEs, as well as they can create an IRA before introducing competition rather than after. We assume that the choices of reforms sequences are affected by institutional, political and economic variables. We use IV-2SLS estimation to analyze the outcome of reforms sequences in terms of telecom performance (access, prices, productivity and quality). We find that an IRA established before privatizing the incumbent operator improves the sector access but with an increase in fixed prices. However, the effect of an IRA before introducing competition differs between the fixed and the mobile sector. Regulation still works as an imperfect substitute for competition in the fixed market, which is no more the case for the mobile market.

Date: 2018
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Published in Revue d'économie politique, 2018, 128, pp.713-743

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