Telecommunications regulatory reform in small island developing states : the impact of WTO's telecommunication commitment

Abstract

Why does the government of one small island developing state produce credible telecommunications reform policies while another cannot? While telecommunications reform (competition, privatization and establishment of an independent regulator) is found to enhance the sector's performance and eventual economic growth in developing countries, it is not clear why several small island developing state governments have hindered, amended or reversed pre-announced telecommunications reform policies. The credibility of telecommunications reform therefore demands an in-depth examination, in particular, to examine the impact of the multilateral trade agreement (World Trade Organization, WTO), bilateral investment treaties and independent regulators on the credibility of domestic telecommunications reform in small island developing states. A mixed-method research design was adopted through comparative case study analyses of Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. Sixty-four semistructured interviews of key telecommunications stakeholders were conducted in the capital city of each case study from June to December 2008. Further, multiple regression analyses based on a panel data of 160 developing countries (including 26 small island developing states) covering the period 1995-2006 were undertaken to triangulate the evidence from the fieldwork. Contrary to conventional findings from the telecommunications and bilateral investment treaty literatures in developing countries, the research found that the establishment of an independent regulator and signatory to Bilateral Investment Treaties instills less pronounced credibility for telecommunications reform in small island developing states, while WTO telecommunications commitment instill stronger credibility. The recent telecommunications reform in the Pacific showed the vulnerability of independent regulators to regulatory capture. The main findings of the research emphasize the importance of considering the disadvantages of smallness when adopting the successful telecommunications policy experiences from larger developing economies into the context of a small island developing state. Show more