The Political Economy of Telecommunications Reform in Developing Countries: Privatization and Liberalization in Comparative Perspective

By Ben A. Petrazzini | Go to book overview
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Introduction

Puzzling and counterintuitive economic reforms are quickly spreading throughout the Third World. Less developed countries (LDCS) are opening their economies to market forces at a striking pace, despite well grounded and convincing arguments that structural constraints in the international system shaped Third World preferences for protectionism and state intervention ( Krasner 1985). In the pursuit of a free market economy, the transformation of the political and economic role of the state has become crucial. Reforms such as privatization of state-owned enterprises (SOEs), liberalization of the economy, and reduction of state regulation are at the center of this historical shift in the organization of developing societies. Among the public services and state industries that are being restructured in most developing nations, one has emerged as the spearhead and showcase of a broader reform program: the telecommunications sector.

In the light of the increasing integration of the global economy (linked by a worldwide telecommunications infrastructure) and the simultaneous economic opening in many LDCs, telecommunications is now a fundamental prerequisite of any national or large-scale growth project in the developing world. As one of the few industries that cuts across and integrates social and economic activities, telecom holds a strategic position in the building of a dynamic and flexible national economy. The sector is central to the national and international flows of capital and commerce. This is specifically true because the merger of telecommunications and computers has radically transformed the role of communications technologies in the productive system. Information traveling

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