Multidimentionality and Renegotiation: Evidence from Transport-Sector PPP Transaction in Latin America

Antonio Estache, J.L. Guasch, Atsushi Iimi and Lourdes Trujillo ()

No 2008_021, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: Multidimensional auctions are a natural and practical solution when auctioneers pursue more than one objective in their PPP transactions. However, it is difficult to achieve auction efficiency with multiple award criteria. Using auction data from road and railway concessions in Latin America, the probability of renegotiation is estimated by a two-stage least squares technique with a binary selection in the first-stage regression. It is found that auctioneers tend to adopt the multidimensional format when the need for social considerations, such as alleviation of unemployment, is high. This implies that such political considerations could hinder efficiency and transparency in auctions. It is also shown that the renegotiation risk in infrastructure concessions increases when multidimensional auctions are used. Rather, good governance, particularly anticorruption policies, can mitigate the renegotiation problem.

Keywords: Multidimensional auctions; infrastructure development; private sector participation; corruption; governance (search for similar items in EconPapers)
JEL-codes: D44 H44 (search for similar items in EconPapers)
Pages: 33 p.
Date: 2008-06
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published by: ECARES, Université Libre de Bruxelles, Bruxelles

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/4403 ... _wpaper_2008_021.pdf RePEc_eca_wpaper_2008_021 (application/pdf)

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:eca:wpaper:2008_021

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... ulb.ac.be:2013/44034

Access Statistics for this paper

More papers in Working Papers ECARES from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().