WELFARE‐IMPROVING PRIVATIZATION POLICY IN THE TELECOMMUNICATIONS INDUSTRY

In: Contemporary economic policy: a journal of Western Economic Association International, Band 24, Heft 2, S. 237-248

Abstract

This article considers the vertical structure of the telecommunications industry and examines the welfare effects of privatization on the public enterprise, where the public enterprise supplies the essential network service of the upstream market and competes against private, independent firms in a mixed downstream market. It is shown that the cost advantage of the independent rivals improves welfare postprivatization. Several relevant and current policy issues on the process of privatization in the telecommunications industry are also discussed. (JEL L50, D42)