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

• Author: Pont, Jaime

Ben A. Petrazzini (Westport, Connecticut: Praeger, 1995) 248 pp.

Open any newspaper with an international perspective and you are bound to read a story about the privatization of a public telecommunications organization or the liberalization of the telecommunications sector. Whether it is France, Germany, the Republic of Korea, India, Nigeria or Peru, telecommunications privatization and liberalization has gained wide acceptance throughout the world.

This literal explosion of telecommunications reform programs has spilled over into the academic realm. The proliferation of books and journal articles that have appeared on this subject in recent years, especially those dealing with less developed countries, is a testimony to the importance attached to telecommunications as a means of development. Ben A. Petrazzini's recent work provides an insightful study into the political economy of this reform process. His study is not a theoretical work, but a comparative historical analysis of these reforms that aims to shed some light onto why countries that share similar goals and patterns of development achieve notably different outcomes in the privatization and liberalization of telecommunications. The study starts with a number of theoretical premises about the role of states borrowed from general social science theory. These are used to explain reform processes in Mexico and Argentina, and are then applied to a number of countries that including: Malaysia, Chile, Thailand and South Africa.

For Petrazzini, an assistant professor at the Hong Kong University of Science and Technology, privatization and liberalization are two separate yet interrelated phenomenon. They are sometimes pushed together through similar policy processes, yet frequently they are decoupled along the way. The origins of the privatization of state-owned telecommunications enterprises (SOTEs) lie in the debt crisis of the early 1980s and the overextension of the state in prior decades. The drive towards liberalization came from international lending institutions--such as the IMF and the World Bank--and neoliberal economists, as well as from large corporate users of telecommunications. However, the outcome of these two processes differed markedly from country to country.

The key to understanding why countries such as Mexico, Malaysia, Chile and Argentina successfully privatized their SOTEs, while Thailand, Colombia and South Africa failed, lies in understanding the role of the...