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Putting all one's eggs in one basket: Relational contracts and the management of local public services

Author

Listed:
  • Claudine Desrieux

    (CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas)

  • Eshien Chong

    (IAE Paris - Sorbonne Business School)

  • Stéphane Saussier

    (GREGOR - Groupe de Recherche en Gestion des Organisations - UP1 - Université Paris 1 Panthéon-Sorbonne - IAE Paris - Sorbonne Business School)

Abstract

French municipalities often contract out the provision of local public services to private companies, and regularly choose the same private operator for a range of different services. We develop a model of relational contracts that shows how this strategy may lead to better performance at lower cost for public authorities. We test the implication of our model using an original database of the contractual choices made by 5000 French local public authorities in the years 2001, 2004 and 2008.

Suggested Citation

  • Claudine Desrieux & Eshien Chong & Stéphane Saussier, 2013. "Putting all one's eggs in one basket: Relational contracts and the management of local public services," Post-Print halshs-01892310, HAL.
    • Handle: RePEc:hal:journl:halshs-01892310
    DOI: 10.1016/j.jebo.2012.03.001
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    Cited by:

    1. Michler, Jeffrey D. & Wu, Steven Y., 2020. "Governance and contract choice: Theory and evidence from groundwater irrigation markets," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 129-147.
    2. Claude Ménard, 2018. "Organization and governance in the agrifood sector: How can we capture their variety?," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 142-160, December.
    3. Jean Beuve & Stéphane Saussier, 2021. "Renegotiations and Renewals of Public Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(3), pages 461-482, November.
    4. Stéphane Saussier, 2013. "Public–private partnerships," Post-Print halshs-01897404, HAL.
    5. Antonio Estache, 2016. "Institutions for Infrastructure in Developing Countries: What We Know and the Lot We still Need to Know," Working Papers ECARES ECARES 2016-27, ULB -- Universite Libre de Bruxelles.
    6. Feng, Zhuo & Zhang, Shui-Bo & Gao, Ying & Zhang, Shuai-Jun, 2016. "Subsidizing and pricing private toll roads with noncontractible service quality: A relational contract approach," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 466-491.

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    More about this item

    Keywords

    Bundling; Contract; Public-private partnerships; Local public services;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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