This paper was developed with financial support from the SBF Bourse de Paris and the New York Stock Exchange, and the assistance of George Sofianos, Bill Tschirhart, and Didier Davidoff is gratefully acknowledged. We appreciate comments received on this paper from Anthony Boardman, Bernardo Bortolotti, Narjess Boubakri, JeanClaude Cosset, Kathy Dewenter, Alexander Dyck, Ivan Ivanov, Ranko Jelic, Claude Laurin, Marc Lipson, Luis Lopez-Calva, John McMillan (the editor), Harold Mulherin, Rob Nash, John Nellis, David Newberry, David Parker, Enrico Perotti, Annette Poulsen, Ravi Ramamurti, Susan Rose-Ackerman, Nemat Shafik, Mary Shirley, Aidan Vining and three anonymous referees. Additionally, we appreciate comments received from participants at the NYSE/Paris Bourse Global Equity Markets conference (Paris, December 1998), the Harvard Institute for International Development Privatization Workshop (June 2000), the International Federation of Stock Exchanges' Third Global Emerging Markets Conference (Istanbul, April 2000), four World Bank and/or International Finance Corporation meetings, two OECD conferences (Paris and Beijing), the 1999 Conference on Privatization and the Kuwaiti Economy in the Next Century, the 1998 Financial Management Association meeting, the 1999 European Financial Management Association meeting, the Fondazione ENI Enrico Mattei (FFEM), the Swiss Banking Institute and Credit Suisse, and seminars at the City University Business School (London), London Guildhall University and the University of Oklahoma. All remaining errors are the authors' alone. Please address correspondence to: William L. Megginson Price College of Business 307 West Brooks, 205A Adams Hall The University of Oklahoma Norman, OK 73019-4005 Tel: (405) 325-2058; Fax: (405) 325-1957 e-mail:...

This paper analyzes the impact of policy reform in basic telecommunications on sectoral performance using a new panel data set for 86 developing countries across Africa, Asia, the Middle East, Latin America and the Caribbean over the period 1985 to 1999. We address three questions. First, what impact do specific policy changes – relating to ownership and competition – have on sectoral performance? Second, how is the impact of change in any one policy affected by the implementation of the other, and by the overall regulatory framework? Third, does the sequence in which reforms are implemented affect performance? We find that both privatization and competition lead to significant improvements in performance. But a comprehensive reform program, involving both policies and the support of an independent regulator, produced the largest gains: an 8 percent higher level of mainlines and a 21 percent higher level of productivity compared to years of partial and no reform. Interestingly, the sequence of reform matters: mainline penetration is lower if competition is introduced after privatization, rather than at the same time. We also find that autonomous factors, such as technological progress, had a strong influence on telecommunications performance, accounting for an increase of 5 percent per annum in teledensity and 9 percent in productivity over the period 1985 to 1999.

This paper examines the political economy of privatization and liberalization in the telecommunications sector in recent decades. We find that countries with stronger pro-reform interest groups, namely, the financial services sector and the urban consumers, are more likely to reform in more democratic countries. However, less democratic countries are more likely to maintain the public sector monopoly when the government benefits more from such a governance mode---when the fiscal deficit is higher. Democracy affects the pace of reforms by magnifying the voices of interest groups in more democratic countries and by moderating politicians' discretion in less democratic countries.

This paper can be downloaded without charge at: The Fondazione Eni Enrico Mattei Note di Lavoro Series Index: http://www. feem. it/web/activ/ activ.html Social Science Research Network Electronic Paper Collection: http://papers. ssm.com/abstract id=XXXXXX The opinions expressed in this paper do not necessarily reflect the position of Privatizations in Developing Countries and the Government's Budget Constraint Summary In this paper, we study the impact of govemment's budget constraint on the optimal industrial policy in industries with increasing returns to scale. We show that privafization is preferred to regulation for intermediate values of the shadow cost of public funds (i.e., the Lagrange multiplier of the government's budget constraint)

This paper examines the regulatory environment of the two most important and contentious energy sectors in the Philippines, namely, the power sector and the downstream oil industry sector. These sectors also experienced recent deregulation initiatives that promise to radically reshape their industrial structures. We examine the laws that govern these initiatives, the cumulation of laws that they supersede and the counter attacks that were or are being mounted either directly or indirectly to reverse the laws.

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acquiring the data used in this study. We are also grateful for comments received from participants at the 1998

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