First Steps Towards New Postal Economics Models for Developing Countries: Learning from the Latin American Experience

Jose Anson, Universal Postal Union
Rudy Cuadra, Universal Postal Union
Altamir Linhares, Universal Postal Union
Guillermo Ronderos, Universal Postal Union
Joelle Toledano, ARCEP and SUPELEC

Abstract

Whereas a lot has been written about the postal sector in industrialized countries, there has been little about the development of postal markets in developing countries (DCs). The purpose of this paper is twofold. First, it underlines the fact that postal economics models developed for industrialized countries (ICs) should not be transposed to DCs. Instead, a number of specificities of DCs should be taken into account in any economic analysis of the postal sector. Second, it provides new econometric results regarding the drivers of domestic letter-post development in DCs, highlighting the necessity of clustering the analysis within various groups of countries. By so doing, a number of new effects appear beyond the traditional link between the GDP and the volume of mail per capita. For low-income countries the latter is no longer statistically significant. The research also captures the negative impact of “laissez-faire” policies on the postal development of many Latin American countries. Consequently, an in-depth analysis of the lack of development of Latin American postal markets is carried out, revealing clear symptoms of destructive unregulated competition. The subsequent high market fragmentation in the region does not seem to favour the development of sufficiently large economies of scale, and is thus likely to disable postal markets' growth.