Regulating telecommunications in developing countries: outcomes, incentives, and commitment

Ahmed Galal and Bharat Nauriyal

No 1520, Policy Research Working Paper Series from The World Bank

Abstract: In response to the recent wave ofprivatizing and regulating monopolies in developing countries, the authors evaluate the impact of different regulatory schemes on private sector behavior in the telecommunications sector in seven countries. They find that regulation is most effective - meaning, it results in substantial investment by the private sector, reasonable returns on this investment, and greater productivity - where the government/regulators reduce the firm's information advantage, induce the firm (through pricing) to operate efficiently, and institute safeguarding mechanisms to protect the firm against expropriation of assets or quasi-rents. Conversely, where the government/regulators fail to resolve information, incentive, and commitment problems, private sector returns are relatively high, and investment and productivity are relatively low.

Keywords: Economic Theory&Research; Environmental Economics&Policies; Decentralization; International Terrorism&Counterterrorism; Public Sector Economics&Finance; Environmental Economics&Policies; Economic Theory&Research; Public Sector Economics&Finance; Knowledge Economy; Education for the Knowledge Economy (search for similar items in EconPapers)
Date: 1995-10-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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