This paper shows empirically that "privatization" in the energy, telecommunications, and water sectors, and the introduction of independent regulators in those sectors, have not always had the expected effects on access, affordability, or quality of services. It also shows that corruption leads to adjustments in the quantity, quality, and price of services consistent with the profit-maximizing behavior that one would expect from monopolies in the sector. The results suggest that privatization and the introduction of independent regulators have, at best, only partial effects on the consequences of corruption for access, affordability, and quality of utility services.

"Driven by ideology, economic reasoning, and early success stories, vast amounts of financial resources and effort have been spent on reforming infrastructure industries in developing countries. It is therefore important to examine whether evidence supports the logic of reforms. The authors review the empirical evidence on electricity reform in developing countries. They find that country institutions and sector governance play an important role in the success and failure of reform. And reforms also appear to have increased operating efficiency and expanded access to urban customers. However, the reforms have to a lesser degree passed on efficiency gains to customers, tackled distributional effects, and improved rural access. Moreover, some of the literature is not methodologically robust and on par with general development economics literature. Further, findings on some issues are limited and inconclusive, while other important areas are yet to be addressed. Until we know more, implementation of reforms will be more based on ideology and economic theory rather than solid economic evidence. "--World Bank web site.

This book adopts an approach of ‘mixed-method research’ with an in-depth qualitative comparative case study analysis triangulated by a quantitative statistical analysis. In particular, the book attempts to capture Small Island Developing States control variables in its empirical analysis, often omitted from telecommunications empirical studies due to limited data. Based on the smallest and most isolated small island states in the World, the research’s comparative case study analysis was conducted in five Pacific Island States (Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu). The book documents the early account of domestic telecommunications policies in Pacific Island case studies deemed useful for future research. In addition, the book proposes concrete policy insights to Small Island Developing State governments, telecommunications operators, academics and relevant international institutions. The book attempts to link three different strands of academic literatures – namely ‘islandness’, ‘telecommunications policy reform’ and ‘international trade agreements (WTO)’ – through analyzing the political economy of telecommunications reform in an island economy context and the role of the fixed-rules of the World Trade Organization on the credibility of telecommunications reform.

Based on a policy-making theoretical framework and on the recent experiences of 10 developing countries, this study explores the factors that lead to the success or failure of telecommunications reform. It provides universal conclusions that might help predict the success or failure of telecommunications policies, such as, privatization and liberalization, in other nations that are moving towards reform. This book is an original contribution to our understanding of the rapid and often complex transformations in telecommunications policies. It defies previous assumptions about conditions for success and failure of policy implementation. Although numerous publications deal with telecommunications policy reform in Europe or the United States, little has been written about it in the developing world. This book fills the gap and will be invaluable for academics, policy makers, and others concerned with communications, economic development, and international business.

Developing countries apply numerous sector-specific taxes to telecommunications, whose buoyant revenues and formal enterprises provide a convenient “tax handle”. This paper explores whether there is an economic rationale for sector-specific taxes on telecommunications and, if so, what form they should take to balance the competing goals of promoting connectivity and mobilizing revenues. A survey of the literature finds that limited telecoms competition likely creates rents that could efficiently be taxed. We propose a “pecking order” of sector-specific taxes that could be levied in addition to standard income and value-added taxes, based on capturing rents and minimizing distortions. Taxes that target possible economic rents or profits are preferable, but their administrative challenges may necessitate reliance on service excises at the cost of higher consumer prices and lower connectivity. Taxes on capital inputs and consumer access, which distort production and restrict network access, should be avoided; so should tax incentives, which are not needed to attract foreign capital to tap a local market.