Post-Tender Corruption and Risk Allocation: Implications for Public-Private Partnerships

28 Pages Posted: 20 May 2011 Last revised: 2 Mar 2014

See all articles by Elisabetta Iossa

Elisabetta Iossa

University of Rome Tor Vergata; IEFE Bocconi University

David Martimort

University of Toulouse 1 - Industrial Economic Institute (IDEI); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: May 17, 2011

Abstract

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

Iossa, Elisabetta and Martimort, David, Post-Tender Corruption and Risk Allocation: Implications for Public-Private Partnerships (May 17, 2011). CEIS Working Paper No. 195. Available at SSRN: https://ssrn.com/abstract=1846507 or http://dx.doi.org/10.2139/ssrn.1846507

Elisabetta Iossa (Contact Author)

University of Rome Tor Vergata ( email )

Via Columbia n.2
Rome, 00133
Italy

IEFE Bocconi University ( email )

Via Roentgen 1
Milan, Milan 20136
Italy

David Martimort

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 5 6112 8614 (Phone)
+33 5 6112 8637 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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