Multidimensionality and Renegotiation : Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America
Multidimensional auctions are a natural and practical solution when auctioneers pursue more than one objective in their public-private-partnership transactions. However, it is difficult to achieve auction efficiency with multiple award criteria. Us...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/07/9670222/multidimensionality-renegotiation-evidence-transport-sector-public-private-partnership-transactions-latin-america http://hdl.handle.net/10986/6847 |
| Summary: | Multidimensional auctions are a natural
and practical solution when auctioneers pursue more than one
objective in their public-private-partnership transactions.
However, it is difficult to achieve auction efficiency with
multiple award criteria. Using auction data from road and
railway concessions in Latin America, the probability of
renegotiation this paper estimates by a two-stage least
squares technique with a binary selection in the first-stage
regression. The findings show that auctioneers tend to adopt
the multidimensional format when the need for social
considerations, such as alleviation of unemployment, is
high. This implies that such political considerations could
hinder efficiency and transparency in auctions. The analysis
also shows that the renegotiation risk in infrastructure
concessions increases when multidimensional auctions are
used. Rather, good governance, particularly anti-corruption
policies, can mitigate the renegotiation problem. |
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