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Why Reform Fails: The 'Politics of Policies' in Costa Rican Telecommunications Liberalization

Bert Hoffmann ()

No 47, GIGA Working Papers from GIGA German Institute of Global and Area Studies

Abstract: As the 'Washington Consensus' reforms are losing momentum in Latin America, the Inter- American Development Bank (IDB) is calling for shifting the focus from the content of policy choices to the political process of their implementation. As this paper studies the paradigmatic case of telecommunications reform in Costa Rica it underscores the importance of these 'politics of policies'. The analysis finds, however, that the failure of repeated liberalization initiatives was not only due to policy-makers' errors in steering the project through 'the messy world of politics' (IDB); instead, as liberalization remained unpopular, policy content indeed mattered, and only the interaction of both explains the outcome. Particular attention is drawn to the political feed-back effects, as the failed reform, precisely because it had been backed by bi-partisan support, became a catalyst for the disintegration of the country's long-standing two-party system.

Keywords: liberalization; privatization; telecommunications; public enterprises; Costa Rica; development model; Inter-American Development Bank (search for similar items in EconPapers)
JEL-codes: E61 E65 H42 L33 L96 O54 (search for similar items in EconPapers)
Date: 2007
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