This paper describes the renegotiation of delegated management contracts in
the French urban transport. We brie y describe the sector, sketch a theoret-
ical model showing that contract renegotiation explains an increasing pro le
of subsidies over time. ThiThis paper describes the renegotiation of delegated management contracts in
the French urban transport. We brie y describe the sector, sketch a theoret-
ical model showing that contract renegotiation explains an increasing pro le
of subsidies over time. This model is nally estimated. Our analysis shows
that wrongly assuming that local governments can fully commit to a pro le
of subsidies and do not renegotiate contracts leads to systematically overesti-
mating the e¢ ciency of rms in the sector.[+][-]