Soft budgets and endogenous renegotiations in transport PPPs: An equilibrium analysis

Most countries keep PPP investments off balance sheet.•Governments renegotiate PPPs and use off-balance sheet finance to elude spending limits.•Future administrations pay a large fraction of the incumbent's additional spending.•Neither ex ante spending limits nor ex post competitive bidding for renegotiated contracts stem the tendency of the incumbent to bring forward infrastructure spending.

DOI: 10.1016/j.ecotra.2018.12.003