Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
Chapter 23: Postal Reform in Developing Countries: Challenges and Choices
Juan B. Ianni† 1. INTRODUCTION Little research has been conducted on why postal reform and modernization in developing countries has lagged behind similar initiatives undertaken in the industrialized world. However, this lack of progress has serious implications both for these countries and for the postal world at large. First, the low productivity of universal service providers (USPs) in developing countries means that governments must direct large subsidies to these operators. Scarce resources must be diverted from critical areas such as health, education, and so on to support what should be a commercially self-sustaining activity. Thus, primarily through taxes and the purchase of value-added services, consumers must pay relatively high prices for less than desired quality. Consumers also willingly pay private operators ﬁve or six times the USP’s basic tariﬀs in order to obtain acceptable service levels (Ansón et al., 2006). Through the Universal Postal Union’s (UPU’s) Quality of Service Fund, industrialized countries are investing a signiﬁcant level of resources to improve quality of service in developing countries and maintain the integrity and competitiveness of the international mail network. These eﬀorts have met with some success, but to fully exploit such gains, USPs in developing countries must achieve a much higher level of operational and ﬁnancial performance. Furthermore, as the UPU moves towards a cost-based terminal dues system, developing country USPs must bring costs and prices into alignment or risk negative compensation ﬂows with higher-priced industrialized countries (Evsen and Roy, 2000). Furthermore, while the growth of digital...
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