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Concessions of Infrastructure in Latin America: Government-led Renegotiation

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  • J. Luis Guasch
  • Jean-Jacques Laffont
  • Stephane Straub

    ()

Abstract

This paper completes Guasch, Laffont and Straub (2003), extending the analysis to the case of government-led renegotiations. We first extend the theoretical framework to a multiple-period context in which both Pareto improving and rent shifting renegotiations at the initiative of the government can occur. We then perform an empirical analysis based on the same sample of 307 water and transport projects in 5 Latin American countries between 1989 and 2000. While some of the main insights, for example concerning the importance of having a regulator in place when awarding concessions and the fragility of price cap regulatory schemes, are unchanged, there are also significant differences, in particular with respect to the effect of investment and financing, as well as the corruption variables. We also provide additional evidence showing that a good regulatory framework is especially important in contexts with weak governance and political opportunism.

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Bibliographic Info

Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 132.

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Length: 44
Date of creation: Apr 2005
Date of revision:
Handle: RePEc:edn:esedps:132

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  9. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications, The World Bank, number 15024, August.
  10. Clive Harris, 2003. "Private Participation in Infrastructure in Developing Countries : Trends, Impacts, and Policy Lessons," World Bank Publications, The World Bank, number 15124, August.
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  16. Estache, Antonio & Guasch, Jose-Luis & Trujillo, Lourdes, 2003. "Price caps, efficiency payoffs, and infrastructure contract renegotiation in Latin America," Policy Research Working Paper Series 3129, The World Bank.
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  23. Laffont,Jean-Jacques, 2005. "Regulation and Development," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521549486.
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  25. Guasch, J. Luis & Laffont, Jean-Jacques & Straub, Stephane, 2005. "Infrastructure concessions in Latin America : government-led renegotiations," Policy Research Working Paper Series 3749, The World Bank.
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