Renegotiation of Concession Contracts in Latin America
High rates of contract renegotiation have raised serious questions about the viability of the concession model to attract private participation in infrastructure in developing countries. After extending in reduced form a standard regulation model, in which renegotiation occurs due to the imperfect enforcement of concession contracts, we use a unique data set of 307 concessions awarded in Latin America from 1989 to 2000, covering the sectors of transport and water, to analyze the determinants of this high incidence of renegotiations of infrastructure contracts. We look in details at the impact, on the probability of renegotiation of a concession, of regulatory institutions, institutional features, economic shocks and of the characteristics of the concession contracts themselves. We then derive some policy implications of our work.
| Main Authors: | , , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2008
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| Subjects: | National Government Expenditures and Related Policies: Infrastructures, Other Public Investment and Capital Stock H540, Comparison of Public and Private Enterprises, Privatization, Contracting Out L330, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements O170, |
| Online Access: | http://hdl.handle.net/10986/5802 |
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| Summary: | High rates of contract renegotiation have raised serious questions about the viability of the concession model to attract private participation in infrastructure in developing countries. After extending in reduced form a standard regulation model, in which renegotiation occurs due to the imperfect enforcement of concession contracts, we use a unique data set of 307 concessions awarded in Latin America from 1989 to 2000, covering the sectors of transport and water, to analyze the determinants of this high incidence of renegotiations of infrastructure contracts. We look in details at the impact, on the probability of renegotiation of a concession, of regulatory institutions, institutional features, economic shocks and of the characteristics of the concession contracts themselves. We then derive some policy implications of our work. |
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