Renegotiation of public contracts: An empirical analysis

- We empirically analyze contract renegotiations in a large dataset of Italian public procurements.
- We document that time and cost renegotiations are systematic, but nearly uncorrelated.
- Factors often suggested to explain renegotiations have opposite effects on price and time renegotiations.
- We find evidence of a linkage between the project design stage and renegotiations during the project execution.

Using a dataset of public contracts awarded in Italy between 2000 and 2007, we document two facts: (i) both price and time renegotiations are systematic, but nearly uncorrelated to each other; (ii) renegotiations are linked to the project design stage.