Glass half empty? politics and institutions in the liberalization of the fixed line telecommunications industry in Turkey

This chapter reviews Turkish experience with reform of the fixed line telecommunications industry. It provides an account of earlier incoherent attempts to privatize the incumbent operator in the absence of any regulatory framework or political consensus. It also describes the regulatory framework emerged in early 2000s and discusses the various political-economic and institutional factors behind its weak implementation, and hence its limited success in promoting competition

Half glass empty? politics & institutions in the liberalization of the fixed line telecommunications industry in Turkey

This chapter reviews Turkish experience with reform of the fixed line telecommunications industry. It provides an account of earlier incoherent attempts to privatize the incumbent operator in the absence of any regulatory framework or political consensus. It also describes the regulatory framework emerged in early 2000s and discusses the various political-economic and institutional factors behind its weak implementation, and hence its limited success in promoting competition

The rise of independent administrative authorities in Turkey: A close look on sources, successes and challenges of this new institutional transformation

Turkey has experienced important institutional transformation during the last decades. In particular, it has started with liberal policies of early 1980s. Turkey has abandoned the import substitution policies after a serious balance of payment crisis. Foreign trade regime has been liberalized and export oriented development strategy has been adopted. The main goal has been to create a market based economy integrated with world markets. However, this first wave of institutional change is far from adequate. On the contrary, inadequate regulatory framework at financial sector and widespread corruption as well as bad macroeconomic management has led to crises between 1990 and 2001. Thus, the institutional change towards regulatory state is triggered with those economic crises. In response to these economic crises and the external pressure of global institutions like the IMF, significant legal changes such as liberalization in utilities sectors and restructuring of banking sector have been realized and some independent regulatory authorities have been set up. The Competition Authority was established in 1994 as part of the Custom Union agreement with the European Union (EU). The Banking Regulation and Supervision Agency was established in 1999 to improve the effectiveness of regulation and supervision and to establish an independent decision-making mechanism for the banking sector. The legal infrastructure for the Central Bank's independence was established by amending some articles of the Banking Law in 2001. Telecommunications Authority and Energy Market Regulatory Authority were set up in 2001 prior to liberalization of communications and electricity generation and distribution markets. The implicit logic of all this so-called structural reforms is to create and enhance the market based economy and the associated rationalization of public management in line with it. The Central Bank's independence from the political authorities that is perceived as a vital guarantee for prevention of irresponsible monetary policies, liberalization of electricity, gas, telecommunications and aviation sectors, privatization of large state monopolies at those utilities sector including Turk Telekom, building independent regulatory authorities, …etc are among some of the important changes of this new institutional era. In this paper, I try to discuss the questions why these significant institutional changes have occurred and what the promises realized and shortfalls of these authorities during the last decade in Turkey by conducting a literature survey. I think that after the introduction of second wave of institutional change, macroeconomic stability has substantially improved by creating a new institutional environment based on market mechanism and state as a regulator. Institutional change has been seemed to be successful for avoiding crisis in spite of the global financial crisis. The robustness of banking sector due to the restructuring is crucial for avoiding crises. On the other hand, new institutional environment is far from perfect. There are some serious risks and deficits. First, legal ambiguities between regulatory agencies may create power struggles and inefficiency. Secondly, having independent regularity authorities and new laws alone does not mean a guarantee for expected effective results. Finally, political class in Turkey is a myopic behaviour and their understanding has very serious short comings. Especially, I argue that the political commitment to support those independent administrative authorities by political elites is limited. I believe that the role of independent administrative authorities and the reorganization of Turkish traditional state structure towards regulatory state will continue to be debated in near future. --

The incomplete transformation of institutions of economic policy: from clientelism to competition?

Economic policy in Turkey has gone through significant amount of transformation in the last three decades. While Turkey used to be a closed economy governed by an import-substitution industrialization strategy, starting in the early 1980s it went through substantial liberalization and privatization, and the market mechanism has gained increased importance in the allocation o

A policy note on telecommunications reform in Algeria

By the end of the 1990s, most industrial and many developing countries had liberalized their telecommunications markets to improve service accessibility and affordability for both businesses and households. In contrast, Algeria still managed its telecommunications sector as public property. The Ministry of Post and Telecommunications set the policy, enforced regulation, and was in charge of service provision. The sector suffered from huge supply shortages, the waiting list lengthened, the quality of service deteriorated and unbalanced the overall fiscal situation. In 1999, a new government appointed in the aftermath of President Bouteflika's election decided to change the situation and launched a comprehensive sector reform. Um reviews progress made in implementing this reform, discusses its preliminary impact, and comments on the main lessons learned. The author shows that by restraining arbitrary administrative action during the reform implementation, the government of Algeria laid the foundation for sustainable growth in the telecommunications sector.Telecommunications Infrastructure,Rural Communications,Knowledge Economy,ICT Policy and Strategies,Enterprise Development&Reform,ICT Policy and Strategies,Telecommunications Infrastructure,National Governance,Rural Communications,Public Sector Economics&Finance

The Nature, Timing and Impact of Broadband Policies: a Panel Analysis of 30 OECD Countries

We empirically investigate the impact of a vast array of public policies on wireline broadband penetration through a novel and unique dataset covering 30 OECD countries, over 1995-2010. We find that while both supply and demand-side policies have a positive effect on broadband penetration, their relative impact depends on the actual stage of broadband diffusion. When an advanced stage is reached, only demand-side policies appear to generate a positive and increasing effect. Moreover, both technological and market competition play a positive role, and the effect of the latter shows a non-linear path along the stage of market development. Finally, the relative weight of the service sector in the national economy reveals to be crucial for broadband penetration. Our analysis provides new insights into the policy debate and in particular on the rationale of a selective policy design for broadband penetration and, in perspective, for the rollout of next-generation networks.telecommunications policies, broadband penetration, infrastructure investments

Measuring services trade liberalization and its impact on economic growth : an illustration

The authors explain how the output growth effect from liberalizing the service sectors differs from the effect from liberalizing trade in goods. They also suggest using a policy-based rather than outcome-based measure of the openness of a country's service regime. They construct such openness measures for two key service sectors'basic telecommunications and financial services. Finally, the authors provide some econometric evidence--relatively strong for the financial sector and less strong, but nevertheless statistically significant, for the telecommunications sector--that openness in services influences long-run growth performance. Their estimates suggest that growth rates in countries with fully open telecommunications and financial services sectors are up to 1.5 percentage points higher than those in other countries.Environmental Economics&Policies,Payment Systems&Infrastructure,Trade Finance and Investment,Economic Theory&Research,ICT Policy and Strategies,Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies,Governance Indicators,ICT Policy and Strategies

The Impact of Liberalizing the Telecommunication Sector in Morocco

The purpose of this paper is to present the major developments recorded in telecommunication sector in Morocco and assess the impact of regulating the telecommunication sector in Morocco along the European Union lines. The basic assumption underlying this work is the following. Further liberalization of various market segments of the telecommunication sector would benefit communications intensive industries that provide key “backbone services” to the economy, such as transport, distribution and finance. It would also improve competitiveness of exporting industries by reducing their costs and facilitating their integration to transnational production networks. The quality and price of telecommunication services directly affect business costs, but also affects the capacity of firms to network and compete in foreign and domestic markets. Finally, development of telecommunication services sector would create more investment opportunities for the domestic private sector, and help attract more FDI and portfolio investment.Telecommunication services, liberalization, Morocco