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After extending the theoretical framework to a multiple\u2010period context in which both Pareto\u2010improving and rent\u2010shifting renegotiations at the initiative of the government can occur, we develop an original instrumental variable strategy to address the issue of contract endogeneity and derive empirical results. While some of the main insights concerning the importance of having a regulator in place when awarding concessions and the fragility of price cap regulatory schemes are unchanged, significant differences arise with respect to the effect of investment and financing, as well as the corruption variables. We provide evidence that a good regulatory framework is especially important in contexts with weak governance and political opportunism. Copyright \u00a9 2007 John Wiley &amp; Sons, Ltd.<\/jats:p>","DOI":"10.1002\/jae.987","type":"journal-article","created":{"date-parts":[[2007,12,21]],"date-time":"2007-12-21T13:48:04Z","timestamp":1198244884000},"page":"1267-1294","source":"Crossref","is-referenced-by-count":147,"title":["Concessions of infrastructure in Latin America: Government\u2010led renegotiation"],"prefix":"10.1002","volume":"22","author":[{"given":"J. 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