Third-Party Opportunism and the Nature of Public Contracts
The lack of flexibility in public procurement design and implementation reflects public agents' political risk adaptation to limit hazards from opportunistic third parties - political opponents, competitors, interest groups - while externalizing the associated adaptation costs to the public at large. Reduced flexibility limits the likelihood of opportunistic challenge lowering third parties' expected gains and increasing litigation costs. We provide a comprehensible theoretical framework with empirically testable predictions.
This paper was developed during Moszoro's period as a Visiting Scholar at the Haas School of Business, University of California, Berkeley in 2009-2011. We thank the participants in the presentations made at Northwestern University, George Mason University, Yale University (Law & CBEY), University of Pennsylvania, Columbia University, University of Southern California (ISNIE 2012), Naval Postgraduate School, São Paulo School of Economics (FGV-EESP), Heriot-Watt University (Edinburgh), Université Paris-Sorbonne, Universite Paris-Dauphine, Technische Universität Berlin, IESE (Barcelona), the Economic Institute of the National Bank of Poland, and the joint Warsaw School of Economics-University of Warsaw Econ Seminar for their comments. We are also particularly indebted to Stéphane Saussier and Carine Staropoli for helpful modeling suggestions, and to Matthew Ellman and Pawel Gasiorowski for an extensive review of an early version of the paper. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
11. Third-party opportunism and the theory of public contracts: operationalization and applications Marian W. Moszoro and Pablo T. Spiller The Manufacturing of Markets Legal, Political and Economic Dynamics Editors: Eric Brousseau, Université de Paris IX (Paris-Dauphine) Jean-Michel Glachant, European University Institute, Florence View all contributors Date Published: May 2014 availability: Available format: Hardback isbn: 9781107053717