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.