Opportunism and Third-Party Influence on Long-Term Public Contracts
Gonzalo Ruiz D.
Additional contact information
Gonzalo Ruiz D.: Departamento de Economía de la Pontificia Universidad Católica del Perú
No 2018-456, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú
The present paper refers to the influence of interest groups and stakeholders on government and concessionaire contractual behavior in long-term public contracts. In particular, we show how government political commitments with interest groups represent a ‘reputational investment’, which reduces the incentives to enforce the contract and increases the willingness to accept renegotiation proposals. This situation, particularly in the case of “high profile” or “politically sensitive” projects, when observed by the private concessionaire, can be exploited to capture additional quasi-rents from the exchange relationship. Using a simple model and a case study of the South Interoceanic Road Project in Peru, we show how interactions of the government with influential stakeholders, in the context of weak institutions, can create favorable conditions for private opportunistic behavior. JEL Classification-JEL: D72 , L14 , L33 , L51
Keywords: Concession; Opportunism; Stakeholder (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-ppm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pcp:pucwps:wp00456
Access Statistics for this paper
More papers in Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú Av. Universitaria 1801, San Miguel, Lima, Perú. Contact information at EDIRC.
Bibliographic data for series maintained by ().