Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization
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In most countries, wireless communications rely on administrative allocation of radio spectrum. The inefficiencies associated with this centralized approach have led economists, starting with Coase in 1959, to suggest “propertyzing” radio spectrum. Critics of this approach assert that property rights impose prohibitive transaction costs and inhibit development of wireless services. Reforms enacted in Guatemala (in 1996) and El Salvador (in 1997) have largely implemented policies suggested by Coase, yielding a natural experiment. Evidence generated in the mobile telephone market suggests that these regimes are associated with relatively efficient policy outcomes, including abundant spectrum availability and a high degree of competitiveness, and with correspondingly low retail prices and high rates of output (minutes of use). Further, such markets appear to avoid high transaction costs in the public or private sectors. We conclude that these liberal reforms tend to produce results consistent with Coase’s policy conjecture.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
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- The Law and Economics of Cedar-Apple Rust: State Action and Just Compensation in Miller v. Schoene
- Does Punishment Matter? A Refinement of the Inspection Game
- Optimal Law Enforcement when the Offender can Dispose of his Wealth
- Rationalizing Drennan: On Irrevocable Offers, Bid Shopping and Binding Range
- Searching for Efficient Enforcement: Officer Characteristics and Racially Biased Policing
- Redistribution Mechanisms
- Using the Event Study Methodology to Measure the Social Costs of Litigation - A Re-Examination Using Cases from the Automobile Industry
- Comparative Causation and Economic Efficiency: When Activity Levels are Constant
- Less Crime, More (Vulnerable) Victims: Game Theory and the Distributional Effects of Criminal Sanctions
- Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization
- Economic Analysis of Law in North America, Europe and Israel
- Path Dependence or Convergence? The Evolution of Corporate Ownership Around the World
- On the Similarity of Bilateral Harm and Unilateral Harm with Role-Type Uncertainty
- The Division of Profit in Sequential Innovation for Probabilistic Patents
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