This is a comparative case study of the relationship between telecommunications decision-making and sector development. It employs a resource dependence model of organizational decision making (Pfeffer and Salancik 1978; Cohen, Grindle and Walker 1985) to explain the development of voice communications (telephony) in North Africa (Algeria, Morocco and Tunisia) from the early 1970s to late 1980s. The study finds that the autonomy of the telecommunication operating entity from domestic political organizations (for financial resources) and from technological organizations (for equipment and services) is associated with the supply and quality of telephone services. Dependence on external financial and technological organizations influences the decisions of the telecommunications operating entity in terms of the levels and priorities of investment, the level and role of technical expertise and choices of technology.

The findings of the study confirm preliminary research by Hirschman (1967), Saunders, Warford and Wellenius (1983), Israel (1987), and Roth (1987), among others, that the autonomy of the telecommunications entity is associated with improved supply and quality of telecommunications services. It is inconsistent with the expectations of earlier studies insofar as it finds that greater autonomy is not always associated with higher levels of investment in the sector. Greater autonomy is associated with higher quality, wider distribution and a comparable provision of services. This occurs (in Algeria) where investment in telecommunications was lower as percentage of GDP than Tunisia. The entities of Tunisia and Morocco (until 1984) were less autonomous, and showed lower levels of technical expertise, and lower quality and supply of services. Given the tendency of a technical organization to function more effectively than a non-technical organization, this study concludes that organizational autonomy is more important to the supply and quality of services than the amount of funds handled by the entity.