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Modeling the effect of contractual incentives on road safety performance

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  • Rangel, Thais
  • Manuel Vassallo, José

Abstract

New contracting approaches, such as Public Private Partnerships (PPPs) are becoming quite popular all around the world to improve the delivery of infrastructure in order to provide value for money. However, the goals of the Government and the private sector may conflict with each other. Whereas the government's goal should be to maximize social welfare through increasing value for money, the private sector is focused on maximizing its profit. Introducing performance based incentives—bonuses and penalties—tied to social goals in contracts is a popular way to align private and government objectives to achieve value for money. The goal of this paper is, by using a quantitative model, to evaluate whether toll highway PPPs, especially those incorporating safety performance based incentives, are actually safer than conventionally procured roads. To this end we have calibrated negative binomial regression models using information from the Spanish high-capacity road network covering years 2007–2009. The results show that toll highways, especially those with safety performance incentives, are ceteris paribus safer than conventionally procured roads, even though safety is still influenced by variables not manageable by the contractor such as traffic volume.

Suggested Citation

  • Rangel, Thais & Manuel Vassallo, José, 2015. "Modeling the effect of contractual incentives on road safety performance," Transport Policy, Elsevier, vol. 40(C), pages 17-23.
    • Handle: RePEc:eee:trapol:v:40:y:2015:i:c:p:17-23
    DOI: 10.1016/j.tranpol.2015.02.009
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    References listed on IDEAS

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    1. Darrin Grimsey & Mervyn K. Lewis, 2005. "Are Public Private Partnerships value for money?," Accounting Forum, Taylor & Francis Journals, vol. 29(4), pages 345-378, December.
    2. Ahmed M. Abdel Aziz, 2007. "A survey of the payment mechanisms for transportation DBFO projects in British Columbia," Construction Management and Economics, Taylor & Francis Journals, vol. 25(5), pages 529-543.
    3. Benito, Bernardino & Montesinos, Vicente & Bastida, Francisco, 2008. "An example of creative accounting in public sector: The private financing of infrastructures in Spain," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(7), pages 963-986.
    4. Thais Rangel & Jesús Galende, 2010. "Innovation in public--private partnerships (PPPs): the Spanish case of highway concessions," Public Money & Management, Taylor & Francis Journals, vol. 30(1), pages 49-54, January.
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    Cited by:

    1. Bae, Bumjoon & Seo, Changbeom, 2022. "Do public-private partnerships help improve road safety? Finding empirical evidence using panel data models," Transport Policy, Elsevier, vol. 126(C), pages 336-342.
    2. Alves, Pedro Jorge & Emanuel, Lucas & Pereira, Rafael Henrique Moreas, 2020. "The causal effect of road concessions on road safety," SocArXiv rqew3, Center for Open Science.
    3. Alves, Pedro Jorge & Emanuel, Lucas & Pereira, Rafael H.M., 2021. "Highway concessions and road safety:Evidence from Brazil," Research in Transportation Economics, Elsevier, vol. 90(C).

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