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Political contestability and public contracting
Author(s) -
Moszoro Marian W.,
Spiller Pablo T.
Publication year - 2019
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12325
Subject(s) - flexibility (engineering) , politics , competitor analysis , procurement , adaptation (eye) , process (computing) , economics , public economics , business , political process , microeconomics , industrial organization , marketing , political science , law , computer science , physics , management , optics , operating system
Abstract Do public agents undertake socially inefficient activities to protect themselves? In politically contestable markets, part of the lack of flexibility in the design and implementation of the public procurement process reflects public agents' risk adaptations to limit the political hazards from opportunistic third parties—political opponents, competitors, and interest groups. Reduced flexibility limits the likelihood of opportunistic challenges, while externalizing the associated adaptation costs to the public at large. We study this matter and provide a comprehensive theoretical framework with empirically testable predictions.