Post-Tender Corruption and Risk Allocation: Implications for Public-Private Partnerships
University of Rome Tor Vergata ; University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)
University of Toulouse 1 - Industrial Economic Institute (IDEI); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
May 17, 2011
CEIS Working Paper No. 195
Whilst a lot has been said about how to fight corruption at tender stage in public procurement, post-tender corruption is an issue that remains almost unexplored. In this paper, we make a step towards filling this gap, by studying the relationship between the quality of a country's institutions, in particular its monitoring technologies and corruption, and the level and form of risk transfer to the contractor. We discuss the desirability of state-contingent clauses, which provide insurance to the contractor but are at high risk of manipulation. We derive implications on the benefit and cost of procurement forms which are based on high levels of risk transfer to the private sector, such as Public Private Partnerships (PPPs).
Number of Pages in PDF File: 28
Keywords: Corruption, Public Private Partnerships and Risk transfer
JEL Classification: D73, D82, L33working papers series
Date posted: May 20, 2011 ; Last revised: May 26, 2011
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