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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:

    1. 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.
    2. Daniel Danau & Annalisa Vinella, 2021. "Under/Over‐Investment and Early Renegotiation in Public‐Private Partnerships," Journal of Industrial Economics, Wiley Blackwell, vol. 69(4), pages 923-966, December.
    3. 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.
    4. Fonseca-Mairena, María Haydée & Triossi, Matteo, 2019. "Incentives and implementation in marriage markets with externalities," Economics Letters, Elsevier, vol. 185(C).
    5. 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.

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