Papers by Stéphane Saussier
In this article, we explore the contractual design of toll infrastructure concession contracts. W... more In this article, we explore the contractual design of toll infrastructure concession contracts. We highlight the fact that the contracting parties try to sign not only complete rigid contracts in order to avoid renegotiations but also flexible contracts in order to adapt contractual framework to unanticipated contingencies and to create incentives for cooperative behavior. This gives rise to multiple toll adjustment provisions and to a tradeoff between rigid and flexible contracts. Such tradeoff is formalized with an incomplete contract framework, including ex post maladaptation and renegotiation costs. Our model highlights the fact that trade-offs are complex and do not correspond to previous propositions coming from a transaction cost framework. More precisely, those previous works argue that a rigid contract is to be preferred as soon as specific assets are high. We highlight the fact that this proposition may be true, but only if other conditions concerning maladaptation costs, ...
Cette note est publiée sous la responsabilité des auteurs et n'engage que ceux-ci. Stéphane Sauss... more Cette note est publiée sous la responsabilité des auteurs et n'engage que ceux-ci. Stéphane Saussier a et Jean Tirole b Renforcer l'effi cacité de la commande publique www.cae-eco.fr Avril 2015 Présidente déléguée Agnès Bénassy-Quéré
While, in practice, the participation of private actors at the local and national government leve... more While, in practice, the participation of private actors at the local and national government levels through various types of contractual agreements has been increasing over the last decades, there are still few studies on the functioning and performances of such relationships. Our aim is to highlight some significant theoret-ical and empirical issues concerning Public–Private Agreements. We first assess the potential sources of efficiency of such contractual agreements. We then examine the selection issue which is a crucial stage for the efficiency of such agreement. Finally, The papers in this special issue of the Review of Industrial Organization originated with an international conference on “Public Private Contracts, Competition and Institutions ” held at the University of Paris I Sorbonne, in December 2007. The purpose of this conference was to confront alternative theoretical approaches and empirical developments on this topic. This special issue reflects this objective of bal...
In this paper we somewhat hope to partially bridge the gap that may exist between theoretical dev... more In this paper we somewhat hope to partially bridge the gap that may exist between theoretical developments and empirical works concerning the efficiency of Public-Private Partnerships. Using an original database concerning 5000 choices made by French local public authorities, we explore the relationships between organizational choices and performances. Following a transaction cost economics approach (Williamson 1999), we make propositions and we test them econometrically. Such an investigation shed some light on two related questions namely 1 / how and why PPP are chosen by local public authorities and 2 / how PPP impact on performances. Results clearly show that contractual choices are not randomly chosen and that the involvement of private operators in the game may improve results, but not always. Furthermore, the capacity to organize competition for the market (ex ante transaction costs) appears to be a crucial element.
What we want to stress in this paper is that, based on a transaction cost economics framework, it... more What we want to stress in this paper is that, based on a transaction cost economics framework, it is possible to go a step further in empirical tests of the theory, not only by trying (1) to explain contractual choices that are observed (what is generally done in previous works) but also, and above all, by attempting (2) to connect observed “misalignment” with the theory’s predictions with observed performances. We urge for such new kind of tests. 2
2Les conclusions présentées dans ce rapport n’engagent que les auteurs du rapport et ne reflètent... more 2Les conclusions présentées dans ce rapport n’engagent que les auteurs du rapport et ne reflètent en aucun cas la position du MEDD. Nous tenons à remercier l’Institut Français de L’environnement, et plus particulièrement Bernard Nanot et Gisèle Rebeix pour leur coopération pour l’obtention des données nécessaires à cette étude et leur confiance. Nous remercions aussi Christelle Pézon (CNAM –Paris), Laetitia Guérin-Schneider (ENGREF – Montpellier), Bernard Barraqué (ENPC
In this paper, we use the incomplete contract theory and transaction cost theory frameworks as co... more In this paper, we use the incomplete contract theory and transaction cost theory frameworks as complementary tools. We analyze contractual practices in various types of services for which several dimensions are non-contractible and specific investments appear to be present only at low levels. Starting with an incomplete contract model, we put forth propositions regarding the make or buy decision. We perform econometrical tests on ground services for aeronautical companies in several countries. As far as we know, it is one of the first econometrical tests of the incomplete contract theory’s propositions. Results show that even without a high level of specific investment, vertical integration may be chosen to avoid opportunistic behavior when crucial dimensions of the service are non-contractible. The paper concludes that non-contractibility may be a crucial determinant of cooperation, as important as uncertainty or specific investments. However, we believe that to understand contract...
The Economics of Public-Private Partnerships, 2018
This introductive chapter proposes a state of play of the different public–private partnership (P... more This introductive chapter proposes a state of play of the different public–private partnership (PPP) arrangements. After recalling their weight in the total provision of infrastructure and public facilities, we define the different PPP families and the way they are generally awarded. This chapter establishes a preliminary basis to understand the economic challenges surrounding the questions on PPPs.
Looking at the issues of water governance through the perspective of the social sciences, books i... more Looking at the issues of water governance through the perspective of the social sciences, books in the Palgrave Series in Water Governance take a global perspective on one of the key challenges facing society today: the sustainable development of water resources and services for all. In stepping away from the traditional focus on engineering and geophysics, the series takes a more holistic approach to both consolidate and generate knowledge that can be applied to different geographic areas by academics, researchers, policy-makers, NGOs and the private sector. This series emphasises the link between science and policy through considering water as a socio-ecological system, water and the territoriality of action, and water in the context of conflicts.
Transportation Research Part A: Policy and Practice, 2018
Transport concession contracts are commonly said to be standardized and too rigid. They would not... more Transport concession contracts are commonly said to be standardized and too rigid. They would not allow public authorities to adapt them to evolving context and circumstances. This paper aims at challenging this view and, more particularly, the view that contractual rigidity for transport concessions is exogenous. Using a transaction cost framework, we disentangle between three main determinants of contractual rigidity: traffic uncertainty; connivance between contracting parties; quality of the institutional environment. Using an original and unique database of mostly French toll road concession contracts, we observe a great variety of provisions for toll adjustment. While our results point out a positive impact of future traffic uncertainty on the propensity to resort to flexible contracts, they also highlight that higher trust between the contracting parties and more reliable institutional environments foster contractual flexibility. These results and the associated policy implications can be helpful in implementing the conditions under which the public and private partners are able to cope with the intrinsic incompleteness of these contracts.
Economia e Politica Industriale, 2018
Journal of Economic Behavior & Organization, 2013
The contracting out of local public services has kept on increasing over the past decades. We obs... more The contracting out of local public services has kept on increasing over the past decades. We observe that local governments regularly choose the same private operator for their different services, i.e. they "bundle" and delegate them to a single firm. We develop a model of relational contracts that shows how this strategy may lead to better performance at lower cost for the public authority. Such a proposition is tested and corroborated using an original database concerning the contractual choices made by 5000 French local public authorities in 1998, 2001 and 2004.
European Journal of Law and Economics, 2006
This paper investigates a new dataset of franchise networks in nine countries in order to assess ... more This paper investigates a new dataset of franchise networks in nine countries in order to assess whether and to what extent do institutions influence the practice of franchising. Our regressions relate the structure of franchise networks (the rate of franchised units as opposed to corporate units) to individual parameters supposed to reflect the extent of moral hazards on the franchisor's and franchisee's sides and, more specifically, to various institutional parameters of the franchisor's country, namely, the legal tradition, the level of procedural formalism, the constraints imposed by labour regulation and the effectiveness of trademark protection. While agency theory parameters seem to perform rather badly in this international setting, institutions such as trademark protection and labour regulation have more explanatory power: greater trademark protection encourages franchising and the impact of labour regulation is mostly positive, depending on the type of labour regulation that is being considered. The effect of legal tradition and formalism seems negligible once these parameters are taken in.
In this paper we investigate the relationship between cost and number of bidders for local transp... more In this paper we investigate the relationship between cost and number of bidders for local transportation contracts in London. Using an original database on 806 calls for tender on local bus transportation routes we find that a higher number of bidders is associated with a lower cost of service. This finding, in addition of being one of the few empirical tests of a crucial theoretical issue, has important policy implications, especially for countries in which bids are organized such that only few bidders are allowed to participate (e.g. France). More precisely, our results point out that the allotment of an urban transport network may be a source of significant costs reductions.
Revue d'économie financière
Journal of Economics & Management Strategy
Uploads
Papers by Stéphane Saussier