The Public Choice View at the 'Deregulation' Movement: Analyzing the Experience of European Telecommunications
| Autor | Dimitrii Trubnikov |
| Cargo | PhD, Research Associate at Tilburg Institute for Law, Technology, and Society (TILT), Tilburg University, Tilburg, Netherlands. Associate Professor of the Department of Economics and Management, Immanuel Kant Baltic Federal University, Kaliningrad, Russia. Email: d.trubnikov@uvt.nl. The article is based on research conducted by the author... |
| Páginas | 1-22 |
The Public Choice View at the “Deregulation” Movement ... (p. 1-22) 1
TRUBNIKOV, D. The Public Choice View at the “Deregulation” Movement: Analyzing the Experience
of European Telecommunications. Law, State and Telecommunications Review, Brasilia, v. 11,
no. 1, p. 1-22, May 2019.
DOI: https://doi.org/10.26512/lstr.v11i1.24846
The Public Choice View at the “Deregulation” Movement:
Analyzing the Experience of European Telecommunications
Submitted: 31/10/2018
Dimitrii Trubnikov*
Revised: 22/11/2018
Accepted: 24/11/2018
Abstract
Purpose – The liberalization of European telecommunications has been expressed
in highly concentrated markets with several major players at the pan-European
level. Instead of fostering competitive marketplaces, the reform has created an
oligopolistic landscape with powerful private corporations. This induces
reasonable questions about the real objectives and the chosen ways of the reform.
Methodology/approach/design – The deregulatory movement in the
telecommunications sector is analyzed through contrasting perspectives of the
public interest approach and public choice theory.
Findings – The chance to change the landscape of the industry has been missed,
and the current trend towards the global o ligopolistic marketplace yields an
unprecedented amount o f economic power to narrow groups at the global scale.
The liberalization movement i ntroduced market mechanisms in the industry, but
the real free and open market has never been formed, and it is possible to assert
that it has never been among the real objectives and intentions of the
policymakers.
Originality/value – The recent surge of “liberalization” in the
telecommunications indu stry speaks rather in favor of the hypothesis of vested
private interests in the policy and that they have always been greatly covered by
the sauce of public interest justifications. The case of telecommunications shows
that ideas and understanding of economic phenomena played an important role in
adoption of regulatory regimes, and it is apparent that people on the top of the
social pyramid have opportunities to pick up and foster those ideas that better fit
their private needs.
*PhD, Research Associate at Tilburg Institute for Law, Technology, and Society
(TILT), Tilburg University, Tilburg, Netherlands. Associate Professor of the
Department of Economics and Management, I mmanuel Kant Baltic Federal
University, Kaliningrad, Russia. Email: d.trubnikov@uvt.nl. The article is based
on research conducted by the author within the Erasmus M undus Joint
International Doctoral Pro gramme in Law, Science and Technology. The author
is grateful to Rona ld Leenes and Pierre Larouche for helpful comments and
discussion. The views expressed in the article and any errors are those of the
author alone.
2
The Public Choice View at the “Deregulation” Movement ... (p. 1-22)
TRUBNIKOV, D. The Public Choice View at the “Deregulation” Movement: Analyzing the Experience
of European Telecommunications. Law, State and Telecommunications Review, Brasilia, v. 11,
no. 1, p. 1-22, May 2019.
DOI: https://doi.org/10.26512/lstr.v11i1.24846
Keywords: liberalization, deregulation, public choice, market concentration,
telecommunications.
1. Introduction
The nature of state interventions into economy might have different
explanations, and two opposite extremes are public and private interests
(Buchanan and Tullock 1962; Laffont and Tirole 1991). When the interventions
are justified by the public interest, the classical arguments st em from the market
failure explanation, and so metimes take a form of appeals for social justice,
humanism, safety and security and other concerns that are not directly connected
to the efficiency problem, but that are supported by theories and concepts from
political philosop hy and social sciences (see, e.g. Stiglitz 1988). Public choice
theory, developed in the 1960s, has promoted the opposite view at public policy
and underlined that the main driving force of political decision-making processes
is private interests of individuals (Peltzman 1989 ; Buchanan and Tullock 1962;
Tullock, Seldon and Brady 2002).
Since the time of appearance of this public and private interest separation
in the economics mainstream, many scholars have tried to analyze various
economic problems from these contrasting perspectives (e.g., Laffont and Tirole
1991; Djankov et al. 2001). The present paper is an attempt to contribute to this
scholarship and to apply these opposite views to the deregulatory moveme nt in
the telecommunications sector with a particular focus at the European experience.
The results of the liberalization reform in the industry are highly concentrated
markets with several major players at the pan-European level, and this induces
reasonable questions about which kind of interests, public or private, have
prevailed in the chosen way of liberalization.
The article begins with a brief review of public and private interest theories
of regulation. After that, it examines the applicabilit y of these theories to the
liberalization refor m o f the telecommunications industry. The main
argumentation of the pap er is concentrated around the position that although the
objectives of the reform indeed represented the public i nterest view, there are
several questions that are better described by the public choice approach. The
paper examines alternatives that could b e adopted by the regulators, arguing that
these alternatives also fit the concept of public interest, and analyzes why this
choice has not been made.
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