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

20 Pages Posted: 11 Apr 2019

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: Summer 2019

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: contractual rigidity, political contestability, procurement

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 (Summer 2019). Journal of Economics & Management Strategy, Vol. 28, Issue 2, pp. 316-335, 2019, Available at SSRN: https://ssrn.com/abstract=3369865 or http://dx.doi.org/10.1111/jems.12268

Jean Beuve (Contact Author)

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

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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