OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Opening the Black Box of Contract Renegotiations

An Analysis of Road Concessions in Chile, Colombia and Peru

This paper studies the renegotiations of road concessions in Chile, Colombia and Peru for the period 1993-2010. First, it analyses the legal framework, the institutional design and the types of concessions of these countries and second, it uses a novel data composed of a sample of 61 of the 62 road concession contracts to explore the renegotiation of these concessions. 50 out of 61 contracts have been modified at least once, resulting in more than 540 renegotiations. All modified contracts were changed for the first time less than 3 years after the initial signing of the concession. Empirical analysis suggests that State-led renegotiations, which were more common than firm-led renegotiations, were motivated by the opportunistic behaviour of governments. State-led renegotiations that added new stretches of roads and that included additional complementary works during governments’ last year in office were costlier than other renegotiations. Finally, governments deferred a larger share of renegotiation’s fiscal costs in State-led renegotiations that took place during their last year in office.


Keywords: concession contracts, Latin America, public private partnerships, renegociation
JEL: R42: Urban, Rural, Regional, Real Estate, and Transportation Economics / Transportation Economics / Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning; O54: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Latin America; Caribbean; P16: Economic Systems / Capitalist Systems / Capitalist Systems: Political Economy; H11: Public Economics / Structure and Scope of Government / Structure, Scope, and Performance of Government; H54: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock; D7: Microeconomics / Analysis of Collective Decision-Making
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error