Multidimensionality and Renegotiation: Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America

  • Antonio Estache
  • Jose-Luis Guasch
  • Atsushi Iimi
  • Lourdes Trujillo
Article

Abstract

Multidimensional auctions are a natural, practical solution when governments pursue more than one objective in their public-private-partnership transactions. However, multi-criteria auctions seem difficult to implement and vulnerable to corruption and opportunistic behavior of both parties involved. Using data from road and railway concessions in Latin America, the paper examines the probability of renegotiation in connection with the selected award criteria. It shows that auctioneers tend to adopt the multidimensional format when the need for social considerations, such as alleviation of unemployment, is high. But more renegotiations would likely happen when the multidimensional format is used. Good governance, particularly regulatory quality and anti-corruption policies, can mitigate the renegotiation problem.

Keywords

Corruption Governance Infrastructure development Multidimensional auctions Private sector participation 

JEL Classification

D44 H44 

Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  • Antonio Estache
    • 1
  • Jose-Luis Guasch
    • 2
  • Atsushi Iimi
    • 3
  • Lourdes Trujillo
    • 4
  1. 1.Université Libre de Bruxelles, European Centre for Advanced Research in Economics and StatisticsBruxellesBelgium
  2. 2.The World Bank (LCSSD)NW WashingtonUSA
  3. 3.The World Bank (FEU)NW WashingtonUSA
  4. 4.Faculdad de Ciencias Economicas y EmpresarialesUniversidad de las Palmas de Gran Canaria, Tafira Las Palmas de Gran CanariaLas PalmasSpain

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