Renegotiation of Concession Contracts in Latin America

43 Pages Posted: 23 Nov 2002

See all articles by J. Luis Guasch

J. Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP)

Jean-Jacques Laffont

University of Southern California - Department of Economics (Deceased)

Stéphane Straub

University of Toulouse 1 - Toulouse School of Economics (TSE)

Date Written: October 2002

Abstract

We construct a regulation model in which renegotiation occurs due to the imperfect enforcement of concession contracts. This enables us to provide theoretical predictions for the impact, on the probability of renegotiation of a concession, of regulatory institutions, institutional features, economic shocks and of the characteristics of the concession contracts themselves. Then we use a data set of nearly 1000 concessions awarded in Latin America and the Caribbean countries from 1989 to 2000, covering the sectors of telecommunications, energy, transport and water, to test these predictions. Finally, we derive some policy implications of our theoretical and empirical work.

Keywords: Renegotiation, Concession contracts, Regulation, LDCs

JEL Classification: D7, L5, O54

Suggested Citation

Guasch, José Luis and Laffont, Jean-Jacques and Straub, Stephane, Renegotiation of Concession Contracts in Latin America (October 2002). USC Law School, Olin Research Paper No. 02-7; USC CLEO Research Paper No. C02-22; and World Bank Policy Research Working Paper No. 3011. Available at SSRN: https://ssrn.com/abstract=340580

José Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP) ( email )

1818 H Street, NW
Washington, DC 20433
United States
202 473 8606 (Phone)
202 522 2106 (Fax)

Jean-Jacques Laffont (Contact Author)

University of Southern California - Department of Economics (Deceased)

No Address Available

Stephane Straub

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

21 Allée de Brienne
F-31042 Toulouse Cedex, 31000
France
05 61 12 85 37 (Phone)
05 61 12 85 38 (Fax)

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