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“Strong versus Weak Vertical Integration: Contractual Choice and PPPs in the United States”

Author

Listed:
  • Daniel Albalate

    (Faculty of Economics, University of Barcelona)

  • Germà Bel

    (Faculty of Economics, University of Barcelona)

  • Richard R. Geddes

    (College of Human Ecology,Cornell University)

Abstract

Public-Private-Partnerships are long-term, relational contracts between a public-sector sponsor and a private partner to deliver infrastructure projects across a range of economic sectors. Efficiency gains may derive from risk transfer and bundling different tasks within a single contract. We study the factors explaining the scope of bundling. We focus on the choice between weak vertical integration, which includes operational tasks alone or construction tasks alone, versus strong vertical integration, which involves the combination of operational and construction tasks. We utilize a new data set that includes 553 PPPs concluded in the U.S. between 1985 and 2013.

Suggested Citation

  • Daniel Albalate & Germà Bel & Richard R. Geddes, 2015. "“Strong versus Weak Vertical Integration: Contractual Choice and PPPs in the United States”," IREA Working Papers 201518, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
    • Handle: RePEc:ira:wpaper:201518
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    References listed on IDEAS

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    1. David Martimort & Flavio Menezes & Myrna Wooders & ELISABETTA IOSSA & DAVID MARTIMORT, 2015. "The Simple Microeconomics of Public-Private Partnerships," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(1), pages 4-48, February.
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    6. Oliver Hart, 2003. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," Economic Journal, Royal Economic Society, vol. 113(486), pages 69-76, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Privatization; Public–Private Partnerships; Contracting; Vertical Integration JEL classification: L14; L33; L51; L88;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy

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