EVALUATING THE COSTS,QUALITY, AND VALUE FOR MONEY OF INFRASTRUCTURE PUBLIC‐PRIVATE PARTNERSHIPS: A SYSTEMATIC LITERATURE REVIEW

Public?private partnerships (PPPs) are often promoted as a means to lower the costs and increase the quality and value for money (VfM) of public construction and infrastructure projects. While the increasing capital stock of PPPs warrants evaluation of their performance there has until now been limited systematic assessment of PPP versus conventional public procurement. This article contributes to the literature by presenting the findings of a systematic review of empirical peer‐reviewed studies comparing the costs, quality, and/or VfM of infrastructure PPP projects with conventional public procurement. The international literature suggests that PPPs are on average more costly and provide approximately similar VfM as conventional procurement. The number of empirical evaluations is limited, however, and evidence on the quality of infrastructure facilities is particularly scarce. While infrastructure PPPs continue to proliferate, systematic assessment of their performance is warranted to assist policy‐makers in choosing the procurement method that offers best value for taxpayers, users and society.     

COMPARING PPP WITH TRADITIONAL PROCUREMENT: THE CASE OF SCHOOLS PROCUREMENT IN IRELAND

Advocates of public‐private partnerships (PPPs) argue that they can deliver public infrastructure more efficiently than traditional procurement through timelier completion and superior value for money. Despite these claims comparative analysis of the performance of both procurement methods has received scant attention in the PPP literature to date. This paper addresses this issue by providing an in‐depth, case‐based comparison of PPP versus traditional procurement in the schools sector in Ireland. Through detailed semi‐structured interviews with key stakeholders and an examination of the available documentation, we assess whether the key objectives of using PPP have been achieved. Overall, we find no evidence that PPP leads to faster delivery of infrastructure when the overall procurement process from contract notice to delivery is accounted for. In addition, we find only limited evidence to suggest that PPP results in better value for money.     

Philippine Infrastructure and Connectivity: Challenges and Reforms

The Philippines has performed creditably well in the past few years. Ensuring better infrastructure and connectivity is crucial in attaining inclusive growth. This will require substantial investments in infrastructure. Various reforms to address the infrastructure lack were implemented but there is scope for more reforms: improving fiscal space, reforming budgetary processes, improving public‐private partnerships (PPPs) and the regulatory environment, and better policy coordination to address problems of connectivity and infrastructure. The Philippines has to continuously improve the governance framework, ensure stability and predictability of policies and regulations. Better coordination among a diverse set of governmental infrastructure bodies, and also between government and the private sector is needed to address infrastructure bottlenecks.     

UNDERSTANDING THE RELATIONSHIP BETWEEN INFRASTRUCTURE PUBLIC‒PRIVATE PARTNERSHIPS AND INNOVATION

While the contemporary academic discourse regards innovation as an inherent feature of infrastructure public?private partnerships (PPPs), the conceptual link between infrastructure PPPs and innovation is narrowly understood. While most existing studies conceptualize the innovation processes and effects within the context of PPP projects, we argue that the relevance of innovation in infrastructure PPPs goes beyond specific projects. In this conceptual article, we examine why and how infrastructure PPP innovations can shape the evolution of the involved private and public sector organizations – and therefore the respective sectors – more broadly. We show that innovation in the context of PPPs has much broader implications and potential outcomes than as emphasized in the literature so far.     

THE USE OF PPP ARRANGEMENTS IN STREET LIGHTING: A WIN‐WIN OPTION?

Street lighting is a classic example of a public good, and governments are extensively involved in its provision. Adequate lighting facilitates both car traffic and personal safety while improving an urban area's character. However, many systems are mismanaged and obsolete, incurring high energy costs and emissions with relatively low lighting quality. Public authorities facing budget constraints often find retrofitting old street‐lighting systems challenging. They have two options: either direct in‐house, public‐authority renovation or contracting with a private company through a public–private partnership (PPP). Although private‐sector‐participation approaches vary, most public authorities can now enter into a street‐light modernization PPP agreement. That can be a win‐win option for both the public and private sectors. The upfront investment is small and operational expenses outweigh capital expenses, generating lower payback periods and energy‐cost reduction with light‐emitting diode (LED) technology. Little public expenditure is necessary when private partners are compensated via shared energy savings. We analyze the Detroit street‐light PPP – the United States’ first – and find that PPPs are practical for retrofitting US street lights and in other countries where they are antiquated.     

THE DIVERSITY GAP IN THE PUBLIC–PRIVATE PARTNERSHIP INDUSTRY: AN EXAMINATION OF WOMEN AND VISIBLE MINORITIES IN SENIOR LEADERSHIP POSITIONS

Despite intense focus on leadership diversity in industries such as high technology, business, the media and academia, to date the infrastructure sector has not received the same level of scrutiny. This paper develops a theoretical framework to explain why leadership diversity matters in the management of complex infrastructure projects delivered through public – private partnerships, and then empirically identifies the diversity gap in senior leadership in the PPP industry worldwide. The study is based on an examination of over 2,800 public and private sector executives, board members and politicians responsible for PPPs in over 90 countries. The results show that women and racial minorities are significantly underrepresented in senior leadership roles, a pattern that is deeply entrenched and consistent globally. The paper concludes by discussing the implications of the findings for the infrastructure industry, and explores how a lack of leadership diversity can influence project management outcomes.     

THE POLITICAL ECONOMY OF PUBLIC‐PRIVATE PARTNERSHIPS AND ANALYSIS OF THEIR SOCIAL VALUE*

ABSTRACT: This article applies political economy theory to public‐private partnerships (PPPs). First, we propose that social welfare is the appropriate normative evaluation criterion to evaluate the social value of PPPs. Second, we specify the goals of PPP participants, including private‐sector partners and governments. Third, we review the observed outcomes of PPPs and analyze them from both a political economy perspective and a social welfare perspective. Fourth, based on a comparison of the actual outcomes of PPPs to normatively desirable social welfare outcomes, we propose some ‘rules for governments’ concerning the design of government PPP institutions and the management of PPPs. We argue that if governments were to adopt these rules there would be fewer PPPs in total, they would be more like traditional government contracts and there would be a greater likelihood of improved social welfare. However, political economy theory also explains why implementation of any reform will be difficult.     

IS A SOCIAL EMPOWERMENT OF PPP FOR INFRASTRUCTURE DELIVERY POSSIBLE? LESSONS FROM SOCIAL IMPACT BONDS

Social Impact Bonds (SIBs) have emerged in recent years as outcome‐based public‐private partnerships (PPP) for the delivery of welfare services, where the payment to the private operator is linked to the achievement of superior social impact. Since the traditional infrastructure‐based PPP approach seems to have failed to achieve higher level of efficiency and, above all, effectiveness, this paper discusses the extent to which the SIB model can represent a reference point to innovate the PPP model by introducing more focus on outcome achievement and social value generation.     

STRATEGIC BUDGET CONSTRAINTS IN A UNIONIZED MIXED OLIGOPOLY

This paper considers the budget‐constraint problem where the government decides whether or not to impose a budget constraint on the public firm, assuming the public firm is less efficient than private firms. We find that imposing budget constraints on the public firm is the preferred choice because of the welfare‐improving effect. Our model suggests that the wage levels of the public firm can be lower or higher than those of private firms depending upon the degree of inefficiency. These results differ from Ishida and Matsushima's findings that in a unionized mixed duopoly, tight budget constraints can enhance social welfare when the public firm is as efficient as private firms.     

The impact of public capital on the US private economy: new evidence and analysis

This paper presents new evidence on the impact of public capital on the productivity of the US private sector. Using a production function approach, we estimate the impact of public investment on private capital productivity, specifically addressing the empirical critiques of earlier studies. We find evidence of a cointegrating relationship in a dynamic specification of an empirical model that includes public infrastructure as a factor of production, indicating the existence of a long‐run relationship between the US public capital stock and the productivity of the private capital stock. The results are used to explore how the decline in the growth rate of the public capital stock would have affected the performance of the private sector.     

MODELS OF PUBLIC–PRIVATE PARTNERSHIPS FOR THE PROVISION OF GOODS

Beside the traditional public–private dichotomy for the provision of public services, an increasing attention has been devoted to the use of public–private partnerships (PPPs). This paper compares relative inefficiencies of public provision, traditional private provision and PPPs as found in real cases, in the literature and through original theoretical models.     

The political economy of public health expenditure and wait times in a public‐private mixed health care system

Abstract This paper investigates the determinants of public health expenditure in a public‐private mixed health care system, where a longer wait time for public care is the major difference between public and private sectors. Voter preferences for health care vary according to their age and by income, and public policy choices are part of a multi‐dimensional, competitive political equilibrium. We show how equilibrium public health expenditure and wait times depend on demographics and explain why they are independent of the distributions of income and political influence. We also show that population aging may not always lead to more public health expenditure.     

Mixed duopoly,privatization, and subsidization with excess burden of taxation

We investigate optimal tax‐subsidy policies in mixed and private oligopolies with excess burden of taxation. We compare the optimal subsidies and the resulting welfare levels among four regimes: mixed and private Cournot duopolies and Stackelberg competition with public and private leaderships. We show that, in contrast to the existing works on the privatization neutrality theorem, privatization affects resulting welfare.     

ON THE ROBUSTNESS OF PRIVATE LEADERSHIP IN MIXED DUOPOLY

We investigate a mixed duopoly where a state‐owned public enterprise competes against a profit‐maximising private enterprise. We analyse whether private leadership or public leadership is robust in the observable delay game. We find that private leadership is always risk dominant. We also investigate how ownership structure in a public firm affects the equilibrium distribution of roles. We find that the roles are as follows: (1) Cournot, when the degree of privatisation is low, (2) private leadership, when it is middle, (3) both private leadership and public leadership, when it is high. The result implies that private leadership is again more robust.     

STRATEGIC OBJECTIVES FOR STATE‐OWNED ENTERPRISES AS A MEANS TO MITIGATE POLITICAL INTERFERENCE: AN EMPIRICAL ANALYSIS OF TWO SWISS STATE‐OWNED ENTERPRISES

When governments act as owners of state‐owned enterprises (SOEs), they are both principal and agent at the same time. The literature on steering SOEs has mainly focused on the government as the principal that must control SOEs. However, the government is also an agent, vis‐à‐vis the parliament, because democratic constitutions stipulate some form of parliamentary oversight of the government. This oversight includes checks on how the government steers SOEs. However, this oversight function gives the parliament the power and opportunity to interfere into steering SOEs, which may lead to parliamentary interventions that are not coherent with governmental steering. We draw on principal–agent literature and public‐accountability literature to show that arbitrary and hands‐on parliamentary interference pose problems for steering SOEs. We analyze whether strategic objectives for SOEs, as recommended by public corporate governance guidelines, are appropriate to minimize parliamentary interference. We hypothesize that the Swiss government avoids or mitigates parliamentary interference by mid‐term strategic objectives for SOEs, which counteract short‐term parliamentary requests. We find that the Swiss government uses mid‐term strategic objectives, particularly financial ones, to reject parliamentary demands for more intervention into SOE activities.     

Optimal privatization of vertical public utilities

Abstract We examine restructuring, divestiture, and deregulation of a vertically integrated public utility, (e.g., electricity), from a public finance perspective. How an optimal restructuring plan for the utility depends on the cost of public funds and on the X‐efficiency gains from privatization, how the optimal degree of competition in the upstream and downstream segments are connected, and implications of privatization for consumer prices are examined. The higher the cost of public funds, the more likely the post‐privatization price will exceed the regulated public utility price. The greater the X‐efficiency gains from privatization, the more likely the post‐privatization price will fall.     

LINKING TWO WORLDS? ENTREPRENEURIAL ORIENTATION IN PUBLIC ENTERPRISES: A SYSTEMATIC REVIEW AND RESEARCH AGENDA

Contemporary public enterprises differ from their forebears. Today, they are more similar to private enterprises, receiving far more attention than previously, when privatization processes all over the world were in the spotlight. Furthermore, the broad research stream of entrepreneurship has so far neglected the consideration of public enterprises. To set a future research agenda, the author examines the dispersed literature using an integrative and organizing framework to identify major topics and research findings. This paper reviews articles that investigate the entrepreneurship in contemporary public enterprises. Despite the growing scholarly interest globally, this systematic literature review indicates there is no more than a loose connection between the literature streams of public entrepreneurship and corporate entrepreneurship. Specifically, the review shows that the multidimensional concept of entrepreneurial orientation has thus far been ignored, although autonomy plays a significant role in the literature review, namely in the context of the interference of the public owner. It also reveals other essential research gaps, such as the development of a modern theory of public enterprises. The linked research stream of public‐sector corporate entrepreneurship offers a broad area of scholarly research and should encourage further investigation.     

Optimal Redistribution with Productive Social Services

Publicly‐provided private goods are conventionally considered consumer goods. Departing from this perspective, we analyze the public provision of inputs that improve household productivity (e.g., education and childcare). In a two‐class economy with distorting taxation, public provision is always welfare improving with respect to pure taxation, given that the public input directly affects household productivity. Moreover, the case for public provision strengthens as households' heterogeneity in input demand fades out, contrary to consolidated results in the literature. The features of optimal provision schemes depend on the nature of publicly provided input, namely, if it substitutes household productive capacity or just helps households to exploit it.     

城市公用事业特许经营 相关问题比较研究

推行特许经营是深化我国城市公用事业市场化改革的一个重要内容。本文在讨论特许经营渊源和实质的基础上,对城市公用事业特许经营与商业特许经营、行政许可、政府购买服务、公私合作（PPP）等相关问题作了比较研究,探讨了它们之间的联系和区别,便于人们准确把握城市公用事业特许经营的内涵和特点,为有效推进城市公用事业特许经营提供理论基础。     

How does a public innovator license a foreign rival?

This paper uniquely considers the optimal two‐part fee of a public firm innovator licensing to a more efficient foreign rival. This is both theoretically interesting and empirically relevant. While previous research emphasises the importance of fixed fees for public firms, we show that, in this case, ad valorem fees typically dominate both fixed fees and per unit royalties. This domination carries over when a private domestic competitor is also added to the market.