We study the effects of a country’s propensity to renegotiate transportation infrastructure contracts on the technical efficiency of the firms they attract. Firms are characterized by their ability to lobby and by their technical efficiency. In equilibrium, countries with a higher propensity...

When the La Niña drought hit Chile in 1998–99, the country's recently reformed electricity sector suffered a price collapse. Power outages followed—but were they inevitable? No. The electricity shortage can be blamed on the rigid price system and deficient regulatory governance. In the...

In this paper we show that fixed-term contracts, which are commonly used to franchise highways, do not allocate demand risk optimally. We characterize the optimal risk-sharing contract and show that it can be implemented with a fairly straightforward mechanisma least-present-value-of-revenue...