Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms

The question of the most effective order of reforming state-owned enterprises has been hotly debated over the years. In the early 1990s, many western advisers encouraged Eastern European countries, and the former Soviet Union, to privatize firms qu...

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Main Author: Wallsten, Scott
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, D.C. 2013
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2002/04/1758948/sequencing-matter-regulation-privatization-telecommunications-reforms
http://hdl.handle.net/10986/14813
id okr-10986-14813
recordtype oai_dc
spelling okr-10986-148132021-04-23T14:03:20Z Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms Wallsten, Scott ACCOUNTING BIDDING BUSINESS OPPORTUNITIES COMPETITIVE ENVIRONMENT COMPETITIVE MARKETS CONSUMERS DEREGULATION ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC PROBLEMS EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL STUDIES EMPLOYMENT EXOGENOUS VARIABLES GDP GDP PER CAPITA INDUSTRIAL ECONOMICS MACROECONOMIC CONDITIONS MACROECONOMICS MONOPOLIES MONOPOLY MONOPOLY PROFITS NATURAL MONOPOLIES NATURAL MONOPOLY NETWORK EXTERNALITIES NEW ENTRANTS OPTIMIZATION PER CAPITA INCOME POSITIVE EFFECTS PRIVATE MONOPOLY PRIVATIZATION PROPERTY RIGHTS PUBLIC POLICY REGULATOR REGULATORS REGULATORY AGENCIES REGULATORY AUTHORITY REGULATORY CAPACITY REGULATORY FRAMEWORK REGULATORY INSTITUTIONS REGULATORY OBJECTIVES REGULATORY REFORM REGULATORY STRUCTURE RISK PREMIUM TELECOM SECTOR TELECOMMUNICATIONS TELECOMMUNICATIONS DEVELOPMENT TELECOMMUNICATIONS INFRASTRUCTURE TELECOMMUNICATIONS NETWORKS TELECOMMUNICATIONS REFORM TELECOMMUNICATIONS REFORMS TELECOMMUNICATIONS SECTOR TELECOMS TELEPHONE DENSITY TELEPHONE PENETRATION TELEPHONE SERVICE TRADE LIBERALIZATION TRANSPORT UNIVERSAL SERVICE VALUATION VAN WEALTH WILLINGNESS TO PAY PRIVATIZATION TELECOMMUNICATIONS REGULATORY FRAMEWORK STATE-OWNED ENTERPRISES TRANSITION ECONOMIES INSTITUTION BUILDING INSTITUTIONAL FRAMEWORK MARKET PENETRATION COMPETITIVENESS TELECOMMUNICATION POLICY POLICY REFORM REGULATORY BODIES REGULATORY BODIES INVESTMENTS PAYMENTS ARRANGEMENTS RISK PREMIUM INVESTOR CONFIDENCE REGULATORY STRUCTURE The question of the most effective order of reforming state-owned enterprises has been hotly debated over the years. In the early 1990s, many western advisers encouraged Eastern European countries, and the former Soviet Union, to privatize firms quickly under the assumption that market institutions would develop once firms were privately owned. The thinking since then has emphasized the importance of establishing an institutional framework conducive to promoting competition before privatizing firms. To date, there has been little empirical work clarifying the debate. The author attempts to address this gap, by examining the effects of the sequence of reform in telecommunications, particularly the effects of establishing a regulatory authority, prior to privatizing incumbent telecommunications firms. Consistent with current thinking, the author finds that countries that established separate regulatory authorities, prior to privatization, saw increased telecommunications investment, fixed telephone penetration, and cellular penetration compared with countries that did not. Moreover, he finds that investors are willing to pay more for telecommunications firms, in countries that established a regulatory authority before privatization. This increased willingness to pay is consistent with the hypothesis that investors require a risk premium to invest, where regulatory rules remain unclear. 2013-08-06T15:02:42Z 2013-08-06T15:02:42Z 2002-04 http://documents.worldbank.org/curated/en/2002/04/1758948/sequencing-matter-regulation-privatization-telecommunications-reforms http://hdl.handle.net/10986/14813 English en_US Policy Research Working Paper;No.2817 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ACCOUNTING
BIDDING
BUSINESS OPPORTUNITIES
COMPETITIVE ENVIRONMENT
COMPETITIVE MARKETS
CONSUMERS
DEREGULATION
ECONOMETRIC ANALYSIS
ECONOMIC DEVELOPMENT
ECONOMIC PROBLEMS
EMPIRICAL ANALYSIS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
EXOGENOUS VARIABLES
GDP
GDP PER CAPITA
INDUSTRIAL ECONOMICS
MACROECONOMIC CONDITIONS
MACROECONOMICS
MONOPOLIES
MONOPOLY
MONOPOLY PROFITS
NATURAL MONOPOLIES
NATURAL MONOPOLY
NETWORK EXTERNALITIES
NEW ENTRANTS
OPTIMIZATION
PER CAPITA INCOME
POSITIVE EFFECTS
PRIVATE MONOPOLY
PRIVATIZATION
PROPERTY RIGHTS
PUBLIC POLICY
REGULATOR
REGULATORS
REGULATORY AGENCIES
REGULATORY AUTHORITY
REGULATORY CAPACITY
REGULATORY FRAMEWORK
REGULATORY INSTITUTIONS
REGULATORY OBJECTIVES
REGULATORY REFORM
REGULATORY STRUCTURE
RISK PREMIUM
TELECOM SECTOR
TELECOMMUNICATIONS
TELECOMMUNICATIONS DEVELOPMENT
TELECOMMUNICATIONS INFRASTRUCTURE
TELECOMMUNICATIONS NETWORKS
TELECOMMUNICATIONS REFORM
TELECOMMUNICATIONS REFORMS
TELECOMMUNICATIONS SECTOR
TELECOMS
TELEPHONE DENSITY
TELEPHONE PENETRATION
TELEPHONE SERVICE
TRADE LIBERALIZATION
TRANSPORT
UNIVERSAL SERVICE
VALUATION
VAN
WEALTH
WILLINGNESS TO PAY PRIVATIZATION
TELECOMMUNICATIONS
REGULATORY FRAMEWORK
STATE-OWNED ENTERPRISES
TRANSITION ECONOMIES
INSTITUTION BUILDING
INSTITUTIONAL FRAMEWORK
MARKET PENETRATION
COMPETITIVENESS
TELECOMMUNICATION POLICY
POLICY REFORM
REGULATORY BODIES
REGULATORY BODIES
INVESTMENTS
PAYMENTS ARRANGEMENTS
RISK PREMIUM
INVESTOR CONFIDENCE
REGULATORY STRUCTURE
spellingShingle ACCOUNTING
BIDDING
BUSINESS OPPORTUNITIES
COMPETITIVE ENVIRONMENT
COMPETITIVE MARKETS
CONSUMERS
DEREGULATION
ECONOMETRIC ANALYSIS
ECONOMIC DEVELOPMENT
ECONOMIC PROBLEMS
EMPIRICAL ANALYSIS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
EMPLOYMENT
EXOGENOUS VARIABLES
GDP
GDP PER CAPITA
INDUSTRIAL ECONOMICS
MACROECONOMIC CONDITIONS
MACROECONOMICS
MONOPOLIES
MONOPOLY
MONOPOLY PROFITS
NATURAL MONOPOLIES
NATURAL MONOPOLY
NETWORK EXTERNALITIES
NEW ENTRANTS
OPTIMIZATION
PER CAPITA INCOME
POSITIVE EFFECTS
PRIVATE MONOPOLY
PRIVATIZATION
PROPERTY RIGHTS
PUBLIC POLICY
REGULATOR
REGULATORS
REGULATORY AGENCIES
REGULATORY AUTHORITY
REGULATORY CAPACITY
REGULATORY FRAMEWORK
REGULATORY INSTITUTIONS
REGULATORY OBJECTIVES
REGULATORY REFORM
REGULATORY STRUCTURE
RISK PREMIUM
TELECOM SECTOR
TELECOMMUNICATIONS
TELECOMMUNICATIONS DEVELOPMENT
TELECOMMUNICATIONS INFRASTRUCTURE
TELECOMMUNICATIONS NETWORKS
TELECOMMUNICATIONS REFORM
TELECOMMUNICATIONS REFORMS
TELECOMMUNICATIONS SECTOR
TELECOMS
TELEPHONE DENSITY
TELEPHONE PENETRATION
TELEPHONE SERVICE
TRADE LIBERALIZATION
TRANSPORT
UNIVERSAL SERVICE
VALUATION
VAN
WEALTH
WILLINGNESS TO PAY PRIVATIZATION
TELECOMMUNICATIONS
REGULATORY FRAMEWORK
STATE-OWNED ENTERPRISES
TRANSITION ECONOMIES
INSTITUTION BUILDING
INSTITUTIONAL FRAMEWORK
MARKET PENETRATION
COMPETITIVENESS
TELECOMMUNICATION POLICY
POLICY REFORM
REGULATORY BODIES
REGULATORY BODIES
INVESTMENTS
PAYMENTS ARRANGEMENTS
RISK PREMIUM
INVESTOR CONFIDENCE
REGULATORY STRUCTURE
Wallsten, Scott
Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
relation Policy Research Working Paper;No.2817
description The question of the most effective order of reforming state-owned enterprises has been hotly debated over the years. In the early 1990s, many western advisers encouraged Eastern European countries, and the former Soviet Union, to privatize firms quickly under the assumption that market institutions would develop once firms were privately owned. The thinking since then has emphasized the importance of establishing an institutional framework conducive to promoting competition before privatizing firms. To date, there has been little empirical work clarifying the debate. The author attempts to address this gap, by examining the effects of the sequence of reform in telecommunications, particularly the effects of establishing a regulatory authority, prior to privatizing incumbent telecommunications firms. Consistent with current thinking, the author finds that countries that established separate regulatory authorities, prior to privatization, saw increased telecommunications investment, fixed telephone penetration, and cellular penetration compared with countries that did not. Moreover, he finds that investors are willing to pay more for telecommunications firms, in countries that established a regulatory authority before privatization. This increased willingness to pay is consistent with the hypothesis that investors require a risk premium to invest, where regulatory rules remain unclear.
format Publications & Research :: Policy Research Working Paper
author Wallsten, Scott
author_facet Wallsten, Scott
author_sort Wallsten, Scott
title Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
title_short Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
title_full Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
title_fullStr Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
title_full_unstemmed Does Sequencing Matter? Regulation and Privatization in Telecommunications Reforms
title_sort does sequencing matter? regulation and privatization in telecommunications reforms
publisher World Bank, Washington, D.C.
publishDate 2013
url http://documents.worldbank.org/curated/en/2002/04/1758948/sequencing-matter-regulation-privatization-telecommunications-reforms
http://hdl.handle.net/10986/14813
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