The political economy of mobile telecommunications liberalization: Evidence from the OECD countries

The change from analogue to digital technologies in the mobile telecom industries at the beginning of the 1990s increased the economic rationale for rendering these markets more competitive. Yet, the speed of reforms have been remarkably different across countries. We empirically investigate this cross-sectional and temporal variation in entry liberalization of OECD countries during the 1990s. A unique data set obtained by merging different sources on political, government and regulatory institutions - as well as private interests and ideologies - allows us to explore in detail several dimensions of the political economy of liberalization. Our findings indicate majoritarian electoral systems as important drivers for change, while independent industry regulators slow down such reforms. Furthermore, powerful industry incumbents hold up the liberalization process and governing bodies that favor a small welfare state accelerate it. The focus on separate elements of countries' institutions aims to shed light on the underlying structure of decision-making processes, providing a base for more structural political economy studies on regulatory change.