NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Rigidity of Public Contracts

Marian Moszoro, Pablo T. Spiller, Sebastian Stolorz

NBER Working Paper No. 21186
Issued in May 2015
NBER Program(s):   LE

We apply algorithmic data reading and textual analysis to compare the features of contracts in regulated industries subject to public scrutiny (which we call "public contracts") with relational private contracts. We show that public contracts are lengthier and have more rule-based rigid clauses; in addition, their renegotiation is formalized in amendments. We also find that contract length and the frequency of rigidity clauses increases in political contestability and closer to upcoming elections. We maintain that the higher rigidity of public contracts is a political risk adaptation strategy carried out by public agents attempting to lower third-party opportunistic challenges.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21186

Users who downloaded this paper also downloaded* these:
Moszoro and Spiller w18636 Third-Party Opportunism and the Nature of Public Contracts
Carpenter and Tello-Trillo w21170 Do ‘Cheeseburger Bills’ Work? Effects of Tort Reform for Fast Food
Galasso and Luo w22712 Tort Reform and Innovation
Spiller w14152 An Institutional Theory of Public Contracts: Regulatory Implications
Aneja, Moszoro, and Spiller w21188 Political Bonds: Political Hazards and the Choice of Municipal Financial Instruments
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us