A strategic analysis of contract termination in public–private partnerships: implications from cases in sub-Saharan Africa

Anthony T. Odoemena and Masahide Horita

Construction Management and Economics, 2018, vol. 36, issue 2, 96-108

Abstract: The paper examines empirically what contributes to the problem of contract termination in public–private partnerships (PPPs) from the perspectives of theories on contracts, transaction costs and industrial organizations. Based on a theoretical exploration of a model of the holdup and underinvestment problems, we identified the profit-sharing mechanism as the contract type that most predisposes a PPP to the inefficiencies that lead to contract termination. We then conducted an empirical examination of a data-set of PPP contracts in sub-Saharan Africa. Using rough sets theory and the logic of explanatory power, we found that contract type outweighs other factors, such as sector and nationality, in the explanation of contract termination.

Date: 2018
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DOI: 10.1080/01446193.2017.1361039

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