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Soft budgets and endogenous renegotiations in transport PPPs: An equilibrium analysis

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  • Engel, Eduardo M.R:A.
  • Fischer, Ronald
  • Galetovic, Alexander

Abstract

•Most countries keep PPP investments off balance sheet.•Governments renegotiate PPPs and use off-balance sheet finance to elude spending limits.•Future administrations pay a large fraction of the incumbent's additional spending.•Neither ex ante spending limits nor ex post competitive bidding for renegotiated contracts stem the tendency of the incumbent to bring forward infrastructure spending.

Suggested Citation

  • Engel, Eduardo M.R:A. & Fischer, Ronald & Galetovic, Alexander, 2019. "Soft budgets and endogenous renegotiations in transport PPPs: An equilibrium analysis," Economics of Transportation, Elsevier, vol. 17(C), pages 40-50.
    • Handle: RePEc:eee:ecotra:v:17:y:2019:i:c:p:40-50
    DOI: 10.1016/j.ecotra.2018.12.003
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    References listed on IDEAS

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    Cited by:

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    2. Jean Beuve & Marian W Moszoro & Pablo T Spiller, 2023. "Doing It by the Book: Political Contestability and Public Contract Renegotiations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(1), pages 281-308.
    3. Ronald Fischer & Nicolás Campos & Eduardo Engel & Alexander Galetovic, 2019. "Renegotiations and Corruption in Infrastructure: The Odebrecht Case," Documentos de Trabajo 346, Centro de Economía Aplicada, Universidad de Chile.
    4. Fonseca-Mairena, María Haydée & Triossi, Matteo, 2019. "Incentives and implementation in marriage markets with externalities," Economics Letters, Elsevier, vol. 185(C).
    5. Bonifaz, José L. & Saavedra, Eduardo H., 2023. "Aggressive bidding and the renegotiation of concession contracts: Empirical evidence from Peru," Utilities Policy, Elsevier, vol. 85(C).
    6. Engel,Eduardo & Ferrari,Martín & Fischer,Ronald & Galetovic,Alexander, 2022. "Managing the Fiscal Risks Wrought by PPPs : A Simple Framework and Some Lessons from Chile," Policy Research Working Paper Series 10056, The World Bank.
    7. Jean Beuve & Stéphane Saussier, 2021. "Renegotiations and Renewals of Public Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(3), pages 461-482, November.

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