Political Contestability and Public Contract Rigidity: An Analysis of Procurement Contracts

Journal of Economics & Management Strategy (Forthcoming)

38 Pages Posted: 3 Mar 2016 Last revised: 15 Jun 2018

See all articles by Jean Beuve

Jean Beuve

University of Paris I Sorbonne

Marian W. Moszoro

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

Stéphane Saussier

IAE - University of Paris I Sorbonne

Date Written: June 5, 2018

Abstract

Are public contracts less adaptable than private contracts? Using a comprehensive set of contracts for a standard product, we compare procurement contracts in which the procurer is either a public administration or a private corporation. We find that public-to-private contracts feature more rigidity clauses than private-to-private contracts and that the use of rigidity clauses in public contracts rises when political risks are more salient. We argue that a significant part of the increased rigidity of public contracts is a contractual adaptation to limit political hazards from political opponents and interested third parties.

Keywords: Procurement, Political Contestability, Contractual Rigidity

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

Suggested Citation

Beuve, Jean and Moszoro, Marian W. and Saussier, Stephane, Political Contestability and Public Contract Rigidity: An Analysis of Procurement Contracts (June 5, 2018). Journal of Economics & Management Strategy (Forthcoming), Available at SSRN: https://ssrn.com/abstract=2739524 or http://dx.doi.org/10.2139/ssrn.2739524

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)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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

Stephane Saussier

IAE - University of Paris I Sorbonne ( email )

21, Rue Broca
Paris, 75005
France

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