Multidimensionality and renegotiation : evidence from transport-sector public-private-partnership transactions in Latin America
AbstractMultidimensional auctions are a natural and practical solution when auctioneers pursue more than one objective in their public-private-partnership transactions. However, it is difficult to achieve auction efficiency with multiple award criteria. Using auction data from road and railway concessions in Latin America, the probability of renegotiation this paper estimates by a two-stage least squares technique with a binary selection in the first-stage regression. The findings show that auctioneers tend to adopt the multidimensional format when the need for social considerations, such as alleviation of unemployment, is high. This implies that such political considerations could hinder efficiency and transparency in auctions. The analysis also shows that the renegotiation risk in infrastructure concessions increases when multidimensional auctions are used. Rather, good governance, particularly anti-corruption policies, can mitigate the renegotiation problem.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4665.
Date of creation: 01 Jul 2008
Date of revision:
Transport Economics Policy&Planning; Debt Markets; Infrastructure Economics; E-Business; Emerging Markets;
Other versions of this item:
- Antonio Estache & Jose-Luis Guasch & Atsushi Iimi & Lourdes Trujillo, 2009. "Multidimensionality and Renegotiation: Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America," Review of Industrial Organization, Springer, vol. 35(1), pages 41-71, September.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-13 (All new papers)
- NEP-DEV-2008-09-13 (Development)
- NEP-PBE-2008-09-13 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Estache, Antonio & Gonzalez, Marianela & Trujillo, Lourdes, 2002.
"What Does "Privatization" Do for Efficiency? Evidence from Argentina's and Brazil's Railways,"
Elsevier, vol. 30(11), pages 1885-1897, November.
- Antonio Estache & Marianela Gonzalez & Lourdes Trujillo, 2002. "What Does Privatization Do for Efficiency? Evidence from Argentina's and Brazil's Railways," ULB Institutional Repository 2013/43980, ULB -- Universite Libre de Bruxelles.
- Andersson, Per & Hultén, Staffan & Valiente, Pablo, 2005. "Beauty contest licensing lessons from the 3G process in Sweden," Telecommunications Policy, Elsevier, vol. 29(8), pages 577-593, September.
- Antonio Estache & D. Benitez, 2005.
"How concentrated are global infrastructure markets?,"
ULB Institutional Repository
2013/43970, ULB -- Universite Libre de Bruxelles.
- Benitez Daniel & Estache Antonio, 2005. "How Concentrated are Global Infrastructure Markets?," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-23, September.
- Benitez, Daniel & Estache, Antonio, 2005. "How concentrated are global infrastructure markets?," Policy Research Working Paper Series 3513, The World Bank.
- Cabizza, Mariella M. & De Fraja, Gianni, 1998. "Quality considerations in auctions for television franchises," Information Economics and Policy, Elsevier, vol. 10(1), pages 9-22, March.
- J. Luis Guasch & Jean-Jacques Laffont & Stephane Straub, 2005.
"Concessions of Infrastructure in Latin America: Government-led Renegotiation,"
ESE Discussion Papers
132, Edinburgh School of Economics, University of Edinburgh.
- J. Luis Guasch & Jean-Jacques Laffont & Stéphane Straub, 2007. "Concessions of infrastructure in Latin America: Government-led renegotiation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1267-1294.
- Guasch, Jose Luis & Laffont, Jean-Jacques & Straub, Stéphane, 2007. "Concessions of Infrastructure in Latin America: Governement-led Renegotiation," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Guasch, Jose Luis & Laffont, Jean-Jacques & Straub, Stéphane, 2005. "Concessions of Infrastructure in Latin America: Goverment-Led Renegotiation," IDEI Working Papers 372, Institut d'Économie Industrielle (IDEI), Toulouse.
- Bajari, Patrick & Tadelis, Steven, 2001.
"Incentives versus Transaction Costs: A Theory of Procurement Contracts,"
RAND Journal of Economics,
The RAND Corporation, vol. 32(3), pages 387-407, Autumn.
- Patrick Bajari & Steven Tadelis, 1999. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," Working Papers 99029, Stanford University, Department of Economics.
- repec:rne:rneart:v:4:y:2005:i:3:p:220-242 is not listed on IDEAS
- Steven Tadelis, 2009.
"Auctions Versus Negotiations in Procurement: An Empirical Analysis,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 25(2), pages 372-399, October.
- Patrick Bajari & Robert McMillan & Steven Tadelis, . "Auctions versus Negotiations in Procurement: An Empirical Analysis," Working Papers 02007, Stanford University, Department of Economics.
- Patrick Bajari & Robert S. McMillan & Steve Tadelis, 2003. "Auctions Versus Negotiations in Procurement: An Empirical Analysis," NBER Working Papers 9757, National Bureau of Economic Research, Inc.
- Cripps, Martin & Ireland, Norman, 1994. "The Design of Auctions and Tenders with Quality Thresholds: The Symmetric Case," Economic Journal, Royal Economic Society, vol. 104(423), pages 316-26, March.
- Kerf, M. & Gray, R.D. & Irwin, T. & Levesque, C. & Taylor, R.R. & Klein, M., 1998. "Concessions for Infrastructure. A Guide to their Design and Award," Papers 399, World Bank - Technical Papers.
- Lalive, Rafael & Schmutzler, Armin, 2008.
"Exploring the effects of competition for railway markets,"
International Journal of Industrial Organization,
Elsevier, vol. 26(2), pages 443-458, March.
- Rafael Lalive & Armin Schmutzler, 2005. "Exploring the Effects of Competition for Railway Markets," Working Papers 0511, University of Zurich, Socioeconomic Institute, revised Apr 2007.
- Guasch, J. Luis & Laffont, Jean-Jacques & Straub, Stéphane, 2008. "Renegotiation of concession contracts in Latin America: Evidence from the water and transport sectors," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 421-442, March.
- Birdsall, Nancy & Nellis, John, 2003. "Winners and Losers: Assessing the Distributional Impact of Privatization," World Development, Elsevier, vol. 31(10), pages 1617-1633, October.
- Torta, Fabio, 2005. "The Concession Through a Bid - the New Brescia-Milan Highway: a Case Study," Research in Transportation Economics, Elsevier, vol. 15(1), pages 135-143, January.
- Antonio Estache & A. Iimi, 2009.
"Auctions with Endogenous Participation and Quality Thresholds: Evidence from ODA Infrastructure Procurement,"
Working Papers ECARES
2009_006, ULB -- Universite Libre de Bruxelles.
- Estache, Antonio & Iimi, Atsushi, 2009. "Auctions with endogenous participation and quality thresholds : evidence from ODA infrastructure procurement," Policy Research Working Paper Series 4853, The World Bank.
- Dethier, Jean-Jacques & Moore, Alexander, 2012. "Infrastructure in developing countries: An overview of some economic issues," Discussion Papers 123305, University of Bonn, Center for Development Research (ZEF).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.