orce, privatized companies facing competitive markets have sharply reduced
Besides discriminating between the impacts generated by privatization from
those induced by commercialization or liberalization, it is important to keep in
mind that, due to the variety of economic, social, and political changes that
LDCs suffered in the 1980s, one should be careful to attribute causality solely to
the sale of SOTEs, commercialization of services, or liberalization of markets.
In the last few years the countries studied here have experienced major economic
changes--such as structural adjustment programs, economic liberalization,
decreased inflation, rapid growth of capital markets, new domestic and foreign
direct investments, and repatriation of capital--that may have influenced
outcomes in the telecom sector. For example, it is hard to tell whether the rise in
the value of privatized firms' shares is linked to the change to private ownership
or to the attractiveness and dynamism of the domestic economy, and, in
particular, of the local stock exchange.
Finally, it is important to stress that this is not a theoretical work. It is,
instead, a comparative historical analysis that uses theory to reach a better
understanding of events in each country studied. In this regard, it does not seek
"universal principles," nor does it try to understand historical processes in the
light of neatly designed models. The research, instead, looks for causal
connections that might offer theoretical insights potentially generalizable to other
similar cases across time and space. For these reasons the study relies heavily
on the methodological tools offered by comparative historical analysis.
If we unbundle this measure by country, we find that among the nineteen
countries reported in 1993, telecom service or equipment companies held the first
or second position in thirteen of them--which places the telecom industry in the
top of approximately 70 percent of the reported cases. In the following countries,
for example, the dominant telecommunications carrier is the top company based
on market value: Britain, Spain, New Zealand, Hong Kong, Argentina, Brazil, Chile, Mexico, and Malaysia. In Canada, France, the United States, and Sweden, telecom
equipment suppliers are among the two top companies of the country. Business
Week, 12 July 1993, 52.
The analysis concentrates on the case of Argentina because it offers the
richest material to explore the accuracy of the hypotheses presented in this work. Mexico constitutes the second most important case, and other LDCs are included,
mainly, to test the generalizability of the suggested hypotheses.
This study it is not an assessment of the virtues or defects of telecom
reforms. It does not prescribe any policy for the sector, nor does it judge in any
way the actions of governments. The notions of "success" and "failure" are linked
to the initial goals each government had, and not to the author's personal view of
the process. The work is comparative in nature and is basically concerned with an
explanation of cross-country policy divergence.
Not all LDCs privatized their SOTEs in the same way. Privatization varies
in pattern and scope in each case, and variation of privatization patterns is an event
that should be explored. However, the task of this project is not to explore the
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: The Political Economy of Telecommunications Reform in Developing Countries:Privatization and Liberalization in Comparative Perspective.
Contributors: Ben A. Petrazzini - Author.
Publisher: Praeger Publishers.
Place of publication: Westport, CT.
Publication year: 1995.
Page number: 9.
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