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Article: BOT projects: incentives and efficiency

TitleBOT projects: incentives and efficiency
Authors
KeywordsIncentive
Infrastructure
Modeling
Monopoly
Price determination
Issue Date2011
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/devec
Citation
Journal of Development Economics, 2011, v. 94 n. 1, p. 127-138 How to Cite?
AbstractIn recent years, governments have been increasingly adopting Build-Operate-Transfer (BOT) contracts for large infrastructure projects. However, BOT contracts have received little attention from economists. The apparent agency problem in BOT projects has never been analyzed. In this paper, we develop a model to examine the incentives, efficiency and regulation in BOT contracts. We show that a BOT contract with a price regulation during the concession period and a license extension after the concession period is capable of achieving full efficiency. Both license extension and price control are observed in many real-world BOT projects. We also investigate the efficiency in such contracts by considering other factors, including time consistency, price ceiling, foreign ownership, and the lack of price regulation. © 2009 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/164731
ISSN
2015 Impact Factor: 1.837
2015 SCImago Journal Rankings: 2.840
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorQiu, LDen_HK
dc.contributor.authorWang, Sen_HK
dc.date.accessioned2012-09-20T08:08:44Z-
dc.date.available2012-09-20T08:08:44Z-
dc.date.issued2011en_HK
dc.identifier.citationJournal of Development Economics, 2011, v. 94 n. 1, p. 127-138en_HK
dc.identifier.issn0304-3878en_HK
dc.identifier.urihttp://hdl.handle.net/10722/164731-
dc.description.abstractIn recent years, governments have been increasingly adopting Build-Operate-Transfer (BOT) contracts for large infrastructure projects. However, BOT contracts have received little attention from economists. The apparent agency problem in BOT projects has never been analyzed. In this paper, we develop a model to examine the incentives, efficiency and regulation in BOT contracts. We show that a BOT contract with a price regulation during the concession period and a license extension after the concession period is capable of achieving full efficiency. Both license extension and price control are observed in many real-world BOT projects. We also investigate the efficiency in such contracts by considering other factors, including time consistency, price ceiling, foreign ownership, and the lack of price regulation. © 2009 Elsevier B.V.en_HK
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/devecen_HK
dc.relation.ispartofJournal of Development Economicsen_HK
dc.subjectIncentiveen_HK
dc.subjectInfrastructureen_HK
dc.subjectModelingen_HK
dc.subjectMonopolyen_HK
dc.subjectPrice determinationen_HK
dc.titleBOT projects: incentives and efficiencyen_HK
dc.typeArticleen_HK
dc.identifier.emailQiu, LD: larryqiu@hku.hken_HK
dc.identifier.emailWang, S: s.wang@ust.hk-
dc.identifier.authorityQiu, LD=rp01093en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.jdeveco.2009.11.008en_HK
dc.identifier.scopuseid_2-s2.0-77957786132en_HK
dc.identifier.hkuros207599en_US
dc.identifier.hkuros209929-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-77957786132&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume94en_HK
dc.identifier.issue1en_HK
dc.identifier.spage127en_HK
dc.identifier.epage138en_HK
dc.identifier.isiWOS:000284439400011-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridWang, S=7410349142en_HK
dc.identifier.scopusauthoridQiu, LD=7201538008en_HK
dc.identifier.citeulike6302460-

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