An exploration of ex post contract adjustment under public private partnership with special investigation of the transportation industry

Fu, Tong

Abstract

This research focuses on ex post Contract Adjustment (CA) under Public Private Partnership (PPP) program. It includes theoretical exploration and empirical investigation. The former has one model while the latter finishes two sets of regression with a simple simulation. The research question is ‘what are the reason for and consequence of ex post Contract Adjustment (expressed by CA only in following) under PPP?’.

PPP has been applied increasingly in developing and developed countries. However, the potential problems surrounding CA under PPP is explored or investigated inadequately by scholars. For one thing, most of literatures in PPP focus on ex ante contract design instead of ex post problems. For another, ex post CA, this topic that should be in New Institutional Economics (NIE) is unfortunately overlooked by NIE. Even some works relate to CA with the focus on some similar topic, e.g. contract renegotiation; CA is treated as a condition instead of process.

Considering the inherent incentive of government to rescue firm under ex post risk to keep PPP program going, our model figure out the specific situation when takeover policy of government has be adopted. The basic conclusion of modelling is that holdup problem or uncontrollable ex post CA(s) could force government to terminate PPP in the end.

For investigating the compensation effect under ex post CA, author creates data after thirty-two PPP case study. It could be found that ex ante contract and the way of ex post adjustment is meaningful as predicted while ex post risk is not as expected for ex post CA. Based on regression, policy suggestions are given for ex post CA under PPP. Moreover, data are also used for simulation, the corresponding conclusion coincides the conclusion of modelling.

Citation

Fu, T. (2014). An exploration of ex post contract adjustment under public private partnership with special investigation of the transportation industry. (Thesis). University of Hull. Retrieved from https://hull-repository.worktribe.com/output/4216092

• Thesis Type: Thesis
• Deposit Date: Dec 5, 2014
• Publicly Available Date: Feb 23, 2023
• Keywords: Economics
• Public URL: https://hull-repository.worktribe.com/output/4216092
• Additional Information: Department of Economics, The University of Hull
• Award Date: Feb 1, 2014