Renegotiations, Discretion and Contract Renewals, An Empirical Analysis of Public-Private Agreements

Numéro: 2011-4

Renegotiations, Discretion and Contract Renewals, An Empirical Analysis of Public-Private Agreements
Jean Beuve, Julie De Brux et Stéphane Saussier
Abstract:This paper studies how renegotiations influence ongoing contractual relationships. By using an original dataset of 252 expired public-private contracts in the French car park sector, we explore the link between  renegotiations and subsequent contract renewals.
We show that renegotiation types, frequencies and scopes influence the probability of renewing a contract when the public authorities have the discretionary power to renew with the same private partner. These findings suggest a positive, negative or neutral influence on contractual surplus depending on the type of renegotiations and contract considered.