Regulation and governance in developing and emerging economies: the experience of Bangladesh telecommunication industry

Regulation and governance in public management are vital for creating strong accountable institutions that can promote inclusive and sustainable growth. To realize twin goals of eradicating poverty and shared prosperity governments, businesses and civil society groups are working together to strengthen public management systems and improve the governance environment. Regulation and the significant issues raised by it have become central to the work of social scientists from many disciplines – political science, economics, law, sociology, psychology, anthropology, history and others (Braithwaite, 2007). The French economist Jean Tirole, has received 2014 Nobel prize arguing how and why governments should regulate powerful companies that dominate markets. He has clarified how to understand and regulate industries with a few powerful firms and explained how market regulations should be carefully adapted to the conditions of specific industries, rather than general regulations.

It is argued by researchers that unclear or questionable objectives, failure to properly target the regulation at the source of the ‘problem’, undue prescription and complexity, overlap, duplication or inconsistency with other regulation, especially across jurisdictions, excessive reporting or other paperwork requirements, poorly expressed, and confusing use of terms and unwarranted differentiation from international standards have not provided any theoretical platform for developing countries to design any framework. The contextual variation has been used by country authorities to avoid standardized compliance regime.

Within the domain of market-led economic development model, the main concern will be on continued development of regulatory structures appropriate to the socio-political environment in the aftermath of economic reform and structural change. Some researchers’ view of the market as a mechanism of regulation, at times, poses a challenge to conventional economics. In the presence of strong tendencies towards the growth of market monopoly, and the desire to capture the benefits of scale of economies, there is a need to investigate how this issue has been addressed in developing and emerging economies.

The paper examines corrupt and unethical practices among the telecommunication companies and ineffective regulatory governance by the regulator, the Bangladesh Telecommunications Regulatory Commission (BTRC). The purpose is to find out reasons for the dominance of informal institutions and the lack of adequate sanctions for illegal, unethical and corrupt practices by the mobile phone firms. The paper argues that poor enforcement of legal
provisions, weak institutions; inadequate corporate governance, and inadequate stakeholder pressure, are some of the reasons behind such practices.