Review of Law & Economics
Editor-in-Chief: Parisi, Francesco
Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A. / Parchomovsky, Gideon / Engel, Christoph
SCImago Journal Rank (SJR) 2014: 0.179
Source Normalized Impact per Paper (SNIP) 2014: 0.610
Impact per Publication (IPP) 2014: 0.311
Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization
1George Mason University, School of Law
2Universidad Francisco Marroquin
3Federal Communications Commission
Citation Information: Review of Law & Economics. Volume 3, Issue 2, Pages 437–484, ISSN (Online) 1555-5879, DOI: 10.2202/1555-5879.1151, December 2007
- Published Online:
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 Coases policy conjecture.
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