Please use this identifier to cite or link to this item: http://hdl.handle.net/10553/49256
Title: Infrastructure investment and incentives with supranational funding
Authors: de Rus, Ginés 
Socorro, M. Pilar
Issue Date: 2010
Publisher: 1614-4007
Journal: Transition Studies Review 
Abstract: Public infrastructure investment is usually co-financed by supranational organizations. The selection of projects is supposed to be decided using the information provided by conventional cost-benefit analysis. Nevertheless, we show that the type of institutional design regarding the financing mechanism affects the incentives of national governments to reduce costs and increase revenues, affecting project selection, the infrastructure capacity, the choice of technology, and the type of contract used for the construction and operation of projects. With a total cost-plus financing mechanism there is no incentive in being efficient and the price charged for the use of the new infrastructure is zero, the market quantity excessive, and the level of supranational financing disproportionate. In contrast, with a sunk cost-plus financing mechanism social optimal pricing is always implemented, though there is no incentive in being efficient. Finally, with a fixed-price financing mechanism the maximal efficiency may be achieved, and the socially optimal pricing is always implemented. © Springer-Verlag 2010.
URI: http://hdl.handle.net/10553/49256
ISSN: 1614-4007
DOI: 10.1007/s11300-010-0163-1
Source: Transition Studies Review[ISSN 1614-4007],v. 17, p. 551-567
Appears in Collections:Artículos
Show full item record

SCOPUSTM   
Citations

9
checked on Nov 3, 2024

Page view(s)

84
checked on Aug 31, 2024

Google ScholarTM

Check

Altmetric


Share



Export metadata



Items in accedaCRIS are protected by copyright, with all rights reserved, unless otherwise indicated.