Jean Beuve

Political Contestability and Contract Rigidity: An Analysis of Procurement Contracts

We compare procurement contracts where the procurer is either a public agent or a private corporation. Using algorithmic data reading and textual analysis on a rich dataset of con- tracts for a standardized product and service from a single provider, we find that public contracts feature more rigidity clauses than private-to-private contracts and their renegotiation is formalized more frequently in amendments. We further compare in-sample public contracts and find similar patterns rising in political contestability using several measures. We argue that a significant part of the contractual rigidity difference between purely private and public contracts due to the specific nature of public contracts which are more permeable to the political environment.

An Economic Analysis of Public–Private Partnerships

In this chapter, the authors explain the advantages related to the outsourcing of public services and the involvement of private partners, as identified in the economic literature. Then, they discuss the main challenges associated with PPPs in terms of transaction costs, information asymmetries, and contractual incompleteness. They end by insisting on the role of the institutional framework to enforce these contracts.

Renegotiating PPP Contracts: Opportunities and Pitfalls

This chapter reflects the double-sided view of the economic literature on contract renegotiation. The authors first describe opportunistic behaviors and the solutions to limit them. Second, they present renegotiation as a way to tackle necessary adaptation and incompleteness issues. They identify the contractual and institutional conditions enabling to favor efficient and balanced contracts life span.

Why Are Modern Bureaucracies Special? State Support to Private Firms in Early-Eighteenth Century France

We ask to what extent early modern bureaucracies could work as policy tools, and take the case of a small French agency, the Bureau du Commerce, which allocated rights and rents to private entrepreneurs via a mix of hierarchical decision-making and peer-based collegial deliberation. This set-up reflected an attempt to maximize information and expertise, but also allowed for the recognition of existing private rights and social interests. We show that the decisions rendered on nearly all applications submitted over a period of twenty years are consistent with an objective of impersonal, rational and informed decision-making process. The final judgment of the key participants (for or against each demand), and the qualitative arguments they brought forward during the procedure, are robust predictors of eventual decisions. This result suggests that progress towards impersonal governance did not derive only from broad realignments within the elites: early modern bureaucracies were more innovative than often assumed and they could follow principles of impersonality, consistency and open access. However, this situation held true only as long as major rent-seeking interests that structured the social and political order were not affected by these early policies.

Mercantilism and Bureaucratic Modernization in Early Eighteenth-Century France

French mercantilism is generally associated with absolutist policy-making subject to capture by rent-seeking interests. This article investigates how the Bureau du Commerce, a small state agency in charge of commerce and the supply side, handed out rents and privileges to private entrepreneurs. We coded how the Bureau investigated and decided all 267 voluntary submissions received between 1724 and 1744. It is shown that the Bureau’s formal, rule-based decision-making process could actually differentiate between alternate policy aims and target them consistently over time, with more or less powerful sets of rents. From this, a hierarchy of revealed policy preferences is derived. First comes technical innovation and diffusion, then local economic development; import substitution is only in the third position, followed by consumers’ welfare. Lastly, and in contrast to a long line of authors, it is shown that the production of luxury goods was not a significant or valued objective.

Enhancing Cooperation in Interfirm Relationships: The Role of Reputation and (In)Formal Agreements

In this paper, we use a large database of more than 3,700 strategic relationships in force between French firms in 2003 to study the way they govern their relationships combining both relational and formal elements. We argue that these two dimensions might be complements or substitutes depending on the characteristics of the relationships as well as the reputations of contracting partners. More precisely, we posit that the formal dimension of the relationship might help to equilibrate hazards between partners increasing cooperation as well as the reputations of the contracting parties acting as hostages. Our empirical results confirm our predictions and thus suggest that competing theoretical frameworks focusing on informal or formal agreements might not tell the entire story. Our results, by showing how those dimensions might complete or be a substitute for each other, shed new light on previous empirical works on this issue.