Procurement in Infrastructure : What Does Theory Tell Us?

Infrastructure has particular challenges in public procurement, because it is highly complex and customized and often requires economic, political and social considerations from a long time horizon. To deliver public infrastructure services to citi...

Full description

Bibliographic Details
Main Authors:	Estache, Antonio, Iimi, Atsushi, Ruzzier, Christian
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ADVERSE SELECTION ASSET OWNERSHIP ASYMMETRIC INFORMATION AUCTION AUCTION DESIGN AUCTIONS BENEFICIARIES BID BID PRICE BIDDING PROCESS BIDS BULK CARGO CAPITAL INVESTMENT CARRIERS COMMERCIAL INVESTMENTS COMPETITION AMONG PORTS COMPETITIVE BIDDING CONCESSION CONCESSION AGREEMENTS CONCESSION CONTRACTS CONCESSIONAIRES CONFLICT OF INTEREST CONFLICTS OF INTEREST CONTRACT ADJUSTMENT CONTRACT ADMINISTRATION CONTRACT AWARD CONTRACT CLAUSES CONTRACT LEASE CONCESSION CONTRACT RENEWAL CONTRACT THEORY CONTRACTOR CONTRACTORS CONTRACTUAL ARRANGEMENTS CONTRACTUAL RELATIONSHIP COORDINATION FAILURE COST-REIMBURSEMENT CUSTOMER SATISFACTION DEBTS DEREGULATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISTRIBUTION COMPANIES DISTRIBUTION FUNCTIONS DISTRIBUTION NETWORK DIVESTITURE ECONOMIC COSTS ECONOMIC EFFICIENCY EFFICIENT ALLOCATION EFFICIENT OUTCOME ELECTRICITY ELECTRICITY DISTRIBUTION ELECTRICITY SECTOR ELECTRICITY SECTOR REFORM ENERGY MANAGEMENT ENERGY SALES FEDERAL PROCUREMENT FINANCIAL PERFORMANCE FINANCIAL STRUCTURE FISCAL DISCIPLINE FRAUD FREIGHT FREIGHT OPERATIONS GENERATION GOVERNMENT OWNERSHIP GOVERNMENT SUBSIDY HIDDEN ACTION HIDDEN ACTION PROBLEM HOURS OF SERVICE INCENTIVE MECHANISMS INCENTIVE PAYMENTS INCOMPLETE CONTRACT INCOMPLETE CONTRACTS INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE DEVELOPMENT PROJECTS INFRASTRUCTURE PROJECTS INFRASTRUCTURE PROVISION INFRASTRUCTURE SECTOR INFRASTRUCTURE SERVICES INITIAL CONTRACT INSTRUMENT INTERNATIONAL BANK INTERNATIONAL STANDARDS INVESTING INVESTMENT REQUIREMENT INVESTMENT REQUIREMENTS JOINT VENTURE JOINT VENTURES LACK OF COMPETITION LACK OF TRANSPARENCY LEASE LEASE CONTRACT LEASE CONTRACTS LEASES LEVEL OF COMPETITION LICENSES LICENSING LONG-TERM COMMITMENT MACROECONOMIC RISKS MANDATE MARKET RISK MONETARY FUND MORAL HAZARD NEGATIVE EXTERNALITIES OPTIMAL CONTRACT ORIGINAL CONTRACTS OWNERSHIP STRUCTURE PARTICULAR CONTRACT POLITICAL ECONOMY PORT OPERATIONS PORTS POSITIVE EXTERNALITIES POWER POWER MARKETS POWER PLANTS POWER SECTOR PRESENT VALUE PRINCIPAL-AGENT MODEL PRINCIPAL-AGENT PROBLEM PRINCIPAL-AGENT RELATIONSHIP PRIVATE FINANCE PRIVATE FINANCING PRIVATE OPERATORS PRIVATE SECTOR PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PROCUREMENT MECHANISM PROCUREMENT OFFICIALS PROCUREMENT PROCEDURE PROCUREMENT PROCESS PRODUCT QUALITY PROPERTY RIGHTS PROVISION OF INFRASTRUCTURE PROVISIONS PUBLIC PUBLIC ASSETS PUBLIC CONTRACT PUBLIC CONTRACTS PUBLIC ECONOMICS PUBLIC FINANCE PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC OWNERSHIP PUBLIC PRIVATE PARTNERSHIPS PUBLIC PROCUREMENT PUBLIC SAFETY PUBLIC SECTOR PUBLIC SECTOR PRODUCTIVITY PUBLIC SERVICES PUBLIC TRANSPORT PUBLIC UTILITY PUBLIC WORKS PUBLICPRIVATE PARTNERSHIPS QUALITY REQUIREMENTS RAIL RAIL PRIVATIZATION RAILWAY RAILWAY SECTOR RAILWAYS REGULATORY SYSTEM RELATIONAL CONTRACT RENEGOTIATED CONTRACTS RENEGOTIATION RENEGOTIATIONS RETRENCHMENT RETURN REVENUE GUARANTEES RISK NEUTRAL ROAD ROAD CONCESSIONS ROLLING STOCK SAFETY SANITATION SAVINGS SELLER SELLERS SERVICE PROVIDER SEWERAGE SERVICES SOCIAL WELFARE SPEEDS SUBCONTRACTORS TARIFF ADJUSTMENTS TELECOMMUNICATIONS THIRD PARTY TIME REQUIREMENT TRAFFIC TRANSACTION TRANSACTION COST TRANSACTION COSTS TRANSPARENCY TRANSPORT INFRASTRUCTURE TRANSPORT INFRASTRUCTURES TRANSPORT SECTOR TRUE UTILITIES VALUATIONS VENDORS VERTICAL INTEGRATION WATER SUPPLY SERVICES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090715105832 http://hdl.handle.net/10986/4185

Description
Summary:	Infrastructure has particular challenges in public procurement, because it is highly complex and customized and often requires economic, political and social considerations from a long time horizon. To deliver public infrastructure services to citizens or taxpayers, there are a series of decisions that governments have to make. The paper provides a minimum package of important economic theories that could guide governments to wise decision-making at each stage. Theory suggests that in general it would be a good option to contract out infrastructure to the private sector under high-powered incentive mechanisms, such as fixed-price contracts. However, this holds under certain conditions. Theory also shows that ownership should be aligned with the ultimate responsibility for or objective of infrastructure provision. Public and private ownership have different advantages and can deal with different problems. It is also shown that it would be a better option to integrate more than one public task (for example, investment and operation) into the same ownership, whether public or private, if they exhibit positive externalities.

Procurement in Infrastructure : What Does Theory Tell Us?

Similar Items