We build on the existing literature in public-private partnerships (PPP) to analyze the main incentive issues in PPPs and the shape of optimal contracts in those contexts. We present a basic model of procurement in a multitask environment in which a risk-averse firm chooses noncontractible...

The winners of auctions for pubic-private partnership contracts, especially for major infrastructure projects such as highways, often enter financial distress, requiring the concession to be reallocated or renegotiated. We build a simple model to identify the causes and consequences of such...

A government delegates a build-operate-transfer project to a private firm in a limited-commitment framework. When the contract is signed, parties are uncertain about the operating cost. The firm can increase the likelihood of facing a low cost by exerting some noncontractible effort while...

This paper analyzes the contracting out of public services through public-private partnerships (PPP) subject to government opportunism. In PPP, the building of public infra-structure and the provision of related services are procured through only one contract. On the one hand, such bundling of...