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Government Concession Contracts in Chile: The Role of Competition in the Bidding Process

  • Ricardo Paredes
  • José Miguel Sánchez


    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Over the last 12 years, Chile has been very successful in attracting private participation into the provision of Public Infrastructure. Private capital has gone into road infrastructure, ports and airports all over the country in the form of Concessions. The aim of the 1991 Concession Law, and that of the specific contracts associated with each project, has been to provide much-needed infrastructure efficiently and without committing government resources better employed elsewhere. Using the contracts of four infrastructure projects involving the private sector in Chile, we show that even though these projects and the Concessions Program are positively evaluated, design flaws in the auction setup directly or indirectly reduced competition in the bidding process, negatively affected performance, created incentives for ex-post renegotiation and precluded welfare maximization.

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Paper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 258.

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Date of creation: 2003
Date of revision:
Publication status: Published as "Government Concession Contracts in Chile: The Role of Competition in the Bidding Process", Economic Development and Cultural Change (revista ISI), octubre, Vol. 53 Nº 1, pp. 215-234, 2004.
Handle: RePEc:ioe:doctra:258
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