EconPapers    
Economics at your fingertips  
 

Transaction cost economics of procurement models in public transport: An institutional perspective

Fatih Canıtez and Dilay Çelebi

Research in Transportation Economics, 2018, vol. 69, issue C, 116-125

Abstract: In recent years, concern has grown over good practices in the procurement processes in public transport. Although promoting competition by competitive tendering to gain efficiency and increase service quality has gradually become common around the world, the applicability of this model in weak institutional environments has some uncertainties. Drawing from new institutional economics (NIE) literature, transaction cost economics (TCE) approach presents important theoretical insights to comprehend the nature of authority and operator relations by underlining the institutional factors that make such procurements effective or not. We argue in this paper that the extent to which transaction structures are embedded in the institutional framework has a substantial impact on the long-run performance of the public transport contracts. A case study of the experience of Istanbul’s public bus transport system, a hybrid regime combining the elements of direct award and tendering and composed of both formal and paratransit transport modes, is proposed to support our theoretical arguments. Our study reveals that all-encompassing contractual solutions which do not take into account the broader institutional environment (culture, norms, policy preferences, property rights etc.) may not work as intended, calling for more hybrid solutions, particularly in weak or developing institutional settings.

Keywords: Public transport; Transaction costs; Procurement types; Competitive tendering; Istanbul; Weak institutional settings; Authority operator relations; New institutional economics (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885917303074
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:retrec:v:69:y:2018:i:c:p:116-125

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-05-18
Handle: RePEc:eee:retrec:v:69:y:2018:i:c:p:116-125