ARE YOU BEING SERVED? THE CONSEQUENCES OF TELMEX MONOPOLISTIC PRIVATIZATION

In the 1990s many countries in the former Soviet bloc, Latin America, Africa, and Asia adopted, in varying degrees, reforms aimed at replacing failed state intervention with market-driven policies. The aim of this paper is to bring support to privatization argument by showing how political considerations have played a crucial role in shaping Mexico's regulatory framework in the telecommunications sector. In other words, the argument of this paper is that political exigencies have conspired against the establishment of market competition in the telecommunications sector thus creating a significant obstacle to the country's economic development. During the presidency of Raul Salinas (1988-1994), Mexico went through a radical shift in economic policy. This paper has tried to show that the collusive way in which Pres Salinas privatized Telmex allowed its new owner, Carlos Slim, to adopt a "winner takes all" approach that severely penalizes both Mexican consumers and businesses.