Rigidity of Public Contracts

Marian Moszoro, Pablo Spiller and Sebastian Stolorz

No 21186, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We apply algorithmic data reading and textual analysis to compare the features of contracts in regulated industries subject to public scrutiny (which we call "public contracts") with relational private contracts. We show that public contracts are lengthier and have more rule-based rigid clauses; in addition, their renegotiation is formalized in amendments. We also find that contract length and the frequency of rigidity clauses increases in political contestability and closer to upcoming elections. We maintain that the higher rigidity of public contracts is a political risk adaptation strategy carried out by public agents attempting to lower third-party opportunistic challenges.

JEL-codes: D23 D73 D78 H57 K23 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-cdm, nep-cta and nep-pol
Note: LE
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Citations: View citations in EconPapers (3)

Published as Marian Moszoro & Pablo T. Spiller & Sebastian Stolorz, 2016. "Rigidity of Public Contracts," Journal of Empirical Legal Studies, vol 13(3), pages 396-427.

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Related works:
Journal Article: Rigidity of Public Contracts (2016)
Working Paper: Rigidity of Public Contracts (2016)
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