Post-Tender Corruption and Risk Allocation: Implications for Public-Private Partnerships
28 Pages Posted: 20 May 2011 Last revised: 2 Mar 2014
Date Written: May 17, 2011
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).
Keywords: Corruption, Public Private Partnerships and Risk transfer
JEL Classification: D73, D82, L33
Suggested Citation: Suggested Citation