The institutional environment and effects of telecommunication privatization and market liberalization in Asia

Abstract

Are the privatization and market competition models resulting in the leveling of the supply-side playing field, and are they demand driven as expected? Quantitative indicators of network expansion and efficiency provide a partial and inconclusive picture. Instead, an evolutionary property rights framework is favored. Examined in detail are the institutional environments that lead to particular types of property rights which in turn affect network expansion and efficiency. The article offers two conclusions: (a) introducing market competition is slow, messy and difficult to manage but, where present, it is better for growth than privatization alone, and (b) network expansion and efficiency are most noticeable where adequate property rights and enforcement mechanisms are in place. It also conjectures that the “East Asia Model” toward network expansion may not be easily generalizable.