Contractual Choices and Technical Efficiency in Public Procurement : the Case of Regional Railway Transport in France
Abstract: This paper contributes to the analysis of the impact of contractual design on the performance in public procurement. It focuses on the case of railway regional transport in France, where the regions were given the prerogatives of a transport organising authority in 2002. One specificity of the sector is that the twenty regional transport authorities have to delegate the operation to the regional branches of a state owned monopoly. This case gives the opportunity to study public procurement in a non-contestable market. Using a stochastic cost frontier we analyse the technical efficiency of the regional branches of the monopoly using an original panel dataset on the twenty contracts covering the period between 2009 and 2012. The empirical results suggest that the market structure alters the incentive properties of the contract. Also we find a decreasing trend in efficiency throughout the processing of the contract despite provisions that should stimulate efficiency.
