Political Contestability and Contract Rigidity: An Analysis of Procurement Contracts

34 Pages Posted: 3 Aug 2014 Last revised: 29 Feb 2016

See all articles by Jean Beuve

Jean Beuve

University of Paris I Sorbonne

Marian W. Moszoro

George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES); Warsaw School of Economics (SGH)

Stéphane Saussier

IAE - University of Paris I Sorbonne

Date Written: February 24, 2016

Abstract

We compare procurement contracts where the procurer is either a public agent or a private corporation. Using algorithmic data reading and textual analysis on a rich dataset of con- tracts for a standardized product and service from a single provider, we find that public contracts feature more rigidity clauses than private-to-private contracts and their renegotiation is formalized more frequently in amendments. We further compare in-sample public contracts and find similar patterns rising in political contestability using several measures. We argue that a significant part of the contractual rigidity difference between purely private and public contracts due to the specific nature of public contracts which are more permeable to the political environment.

Keywords: Contractual Rigidity, Private and Public Procurement, Political Contestability, Renegotiation

JEL Classification: D23, D72, D73, D78, H57

Suggested Citation

Beuve, Jean and Moszoro, Marian W. and Saussier, Stephane, Political Contestability and Contract Rigidity: An Analysis of Procurement Contracts (February 24, 2016). Available at SSRN: https://ssrn.com/abstract=2475164 or http://dx.doi.org/10.2139/ssrn.2475164

Jean Beuve

University of Paris I Sorbonne ( email )

Maison des Sciences Economiques (B 227)
106-112 Bd de l'Hôpitak
Paris Cedex 13, 75013
France
+33144078323 (Phone)

Marian W. Moszoro (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

Stephane Saussier

IAE - University of Paris I Sorbonne ( email )

21, Rue Broca
Paris, 75005
France

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