An economic analysis of the closure of markets and other dysfunctions in the awarding of concession contracts

Abstract

Because concession contracts are long-term agreements that are inherently incomplete, the economic literature suggests that rigid award rules are inadequate. We suggest that the Directive should contain a right mix of flexible and rigid rules, as well as procedures to increase transparency and accountability of contracting parties. This briefing note provides suggestions in order to avoid the closure of markets and other dysfunctions in the award of concession contracts.