Doing It by the Book: Political Contestability and Public Contract Renegotiations.

This article develops a public procurement model explaining that the higher frequency of renegotiations in public contracts compared to private contracts results from the inherent rigidity imposed by political scrutiny and competition. Contractual flexibility allows informal adaptations without formal renegotiations, but political tolerance for deviations decreases with political contestability, prompting public agents to adopt more rigid contracts to minimize political risks. Empirical analysis of nearly 300 car park contracts in France shows that public-to-private contracts are renegotiated 7–13% more often than private-to-private contracts, and that renegotiation rates increase with political contestability through heightened contractual rigidity. The findings suggest that frequent renegotiations in public contracts reflect adaptive responses to political hazards rather than solely inefficiencies or opportunism, highlighting the relational quality of such renegotiations in politically contested environments.