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Conclusions
Design
Conditionalities
Implementation State Institutions
Implementation Companies
Outcome
The World Bank paradigm focussing on privatization’s were transmitted by conditionalities to African states during the nineties.
The support from the African state to implementation was nonetheless not uniform. The privatization’s carried through did not produce a spectacular breakthrough for service production.
Two spectacular different outcomes is pictured for respectively privatization and deregulation. Both strategies work on good governance premises and in contexts of Neo Patrimonial practises.
Seen in relation other parts of the world the overriding characteristic of the effects of sector reforms in Africa is the limited and weak results of public sector reform for fixed lines.
The structural conditions for privatization were realistically delineated to be the regulatory as well as financial conditions present in SSA and the rationale behind privatization works on Good Governance premises.
Regulatory institutions were installed in a number of African countries during the nineties with very varying powers regarding formulation of licences in a context of weak or absent competition councils and weak institutional traditions.
In the context of neo-patrimonial practices the rationale simply does not work.
The strategy of the World Bank for instant privatization and deregulation even without regulatory pre conditions in place, however has the danger of creating a policy lock-in. A policy lock-in occurs when present opportunities are used to the detriment of future. In this instance privatization entails that a private operator operates on its own business plan and does not take public considerations into account. The main operator may have long established relations to the state department and may try to block regulatory reform.
The benefits of privatization only occur if the phases of the privatization process are not derailed and if the sale of equity is conducted after transparent procedures involving competition. Also necessary for deregulation is transparency on a “level playing field” necessary to obtain the benefits of competition. For these forces to work they must be implemented within capable regulatory frameworks. The key instruments within telecommunication are the licenses. In the licenses expansion targets must be elaborated as well as quality of service delivery and social obligations regarding public telephones and rural telephones. It takes very specialized skills to target on the one hand, the capacities of the operator and on the other hand, to balance it with national development targets. Few countries have elaborated a national infrastructure plan as a base of reference for the operator’s business plan. If the course of liberalization is decided by the political elite with a second network operator, specialized skills at the regulatory level are needed to draft a second licence and include interconnection clauses appropriate to the needs of value added operators (internet operators) as well as mobile operators
In contrast to the fixed networks and in contrast to initially, mobile networks can play a much more prominent role. The construction of dipole and oligopoly has in a number of countries succeeded in competition. The market dynamics were established due to introduction of a number of new entrants in a playing field. In effect the fact that more players have been introduced into the once docile monopoly area is going to strengthen the regulatory institutions. The mobile operators are united in the need for a “level playing field” and transparent relations to the main operator. Over time the plurality of players will strengthen regulatory institutions. Thus even in structures and institutions with elements of patrimonial practices the market dynamic may curb such effects.
The analysis calls for different kind of institutional development projects than importation of selective institutional designs. Development projects must be based on analysis of capacity of other formal (e.g. competition authority) and informal institutions (e.g. patrimonial).
The regulator’s intervention is then crucial to enable the market dynamic to be created. Their rapid and effective establishment together with long term capacity development is an essential imperative.
The effect of twenty years of SAL has been that the state in developing countries has been stripped to the bone. Reconstructing the administrative apparatus is a central task.).
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