Political contestability and public contract rigidity: An analysis of procurement contracts

Jean Beuve, Marian Moszoro and Stephane Saussier ()

Journal of Economics & Management Strategy, 2019, vol. 28, issue 2, 316-335

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.

Date: 2019
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Citations: View citations in EconPapers (14)

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https://doi.org/10.1111/jems.12268

Related works:
Working Paper: Political Contestability and Public Contract Rigidity: An Analysis of Procurement Contracts (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:28:y:2019:i:2:p:316-335

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