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Political contestability and public contracting

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  • Marian W. Moszoro
  • Pablo T. Spiller

Abstract

Do public agents undertake socially inefficient activities to protect themselves? In politically contestable markets, part of the lack of flexibility in the design and implementation of the public procurement process reflects public agents' risk adaptations to limit the political hazards from opportunistic third parties—political opponents, competitors, and interest groups. Reduced flexibility limits the likelihood of opportunistic challenges, while externalizing the associated adaptation costs to the public at large. We study this matter and provide a comprehensive theoretical framework with empirically testable predictions.

Suggested Citation

  • Marian W. Moszoro & Pablo T. Spiller, 2019. "Political contestability and public contracting," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(5), pages 945-966, October.
    • Handle: RePEc:bla:jpbect:v:21:y:2019:i:5:p:945-966
    DOI: 10.1111/jpet.12325
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    References listed on IDEAS

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    Cited by:

    1. Marian W. Moszoro & Pablo T. Spiller, 2018. "Implications of Third Parties for Contract Design," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 5-16, March.
    2. Joanna Piechucka, 2020. "Cost Efficiency and Endogenous Regulatory Choices: Evidence from the Transport Industry in France," Discussion Papers of DIW Berlin 1851, DIW Berlin, German Institute for Economic Research.
    3. Jean Beuve & Marian W. Moszoro & Stéphane Saussier, 2019. "Political contestability and public contract rigidity: An analysis of procurement contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 316-335, April.
    4. Jean Beuve & Marian W Moszoro & Pablo T Spiller, 2023. "Doing It by the Book: Political Contestability and Public Contract Renegotiations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(1), pages 281-308.
    5. Joanna Piechucka, 2021. "Cost efficiency and endogenous regulatory choices: evidence from the transport industry in France," Journal of Regulatory Economics, Springer, vol. 59(1), pages 25-46, February.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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