Regulatory governance in the Latin American telecommunications sector

As the world economy becomes more integrated, recognition of the need for expanded and modernized telecommunications services has pervaded the plans and policies of most Latin American countries. Telecommunications reform has been implemented in almost all the Latin American and Caribbean countries. This paper looks at trends in 25 countries in the region. It examines the theoretical aspects that a regulatory framework for telecommunications should have and constructs an index that measures how regulatory governance in telecommunications has evolved during the period 1980-2001.

After providing an overview of the economic, political and institutional context for telecom performance in the sample of countries, the paper defines and describes the main elements that a regulatory index should contain. It also provides a brief presentation of theoretical points of view as well as practitioners' insights.

Using the broad categories of autonomy, accountability, clarity of roles, and transparency and participation, the main characteristics emphasized by policy analysts and practitioners, the paper constructs an index of the regulatory framework for the telecommunications sector. The paper then presents some estimates of the index and its evolution during the period under study and attempts to test how the regulatory framework index evolved relative to some political and institutional indices.

The main finding of the paper is that the regulatory framework index shows that almost all countries studied have made considerable progress in this area, although their pace and scope have varied. It concludes that efforts by countries in the region to build a sound regulatory environment for the telecommunications sector have been fruitful. However, the paper suggests that because events and politics can circumvent the law, the regulatory framework index needs to be extended to incorporate more factors and to take into account the regulatory incentives likely to become more and more important in the near future.