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2018 | Book

Introduction: The Economics of Public–Private Partnerships Read chapter Read first chapter

The Economics of Public-Private Partnerships

Theoretical and Empirical Developments

Editors: Prof. Stéphane Saussier, Ph.D. Julie de Brux

Publisher: Springer International Publishing

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book investigates the economic decisions behind the implementation of public-private partnerships (PPPs). The first part of the book discusses different forms of public procurement contracts, in particular in France and the UK, and provides an economic analysis of the potential advantages and pitfalls of public-private partnerships. This exploration of PPPs’ efficiency also includes an examination of the financing conditions of public procurements, as well as regulatory requirements. By reviewing empirical studies on PPPs, the second part of the book compares their advantages over purely public solutions and offers practical guidance on their implementation. Practitioners will also learn best practices on how to involve stakeholders in calls for bids.

Table of Contents

Frontmatter
Introduction: The Economics of Public–Private Partnerships
Abstract
This introductive chapter proposes a state of play of the different public–private partnership (PPP) arrangements. After recalling their weight in the total provision of infrastructure and public facilities, we define the different PPP families and the way they are generally awarded. This chapter establishes a preliminary basis to understand the economic challenges surrounding the questions on PPPs.
Julie de Brux, Stéphane Saussier

Definitions, Scope and Economic Analysis of PPPs

Frontmatter
An Economic Analysis of Public–Private Partnerships
Abstract
In this chapter, the authors explain the advantages related to the outsourcing of public services and the involvement of private partners, as identified in the economic literature. Then, they discuss the main challenges associated with PPPs in terms of transaction costs, information asymmetries, and contractual incompleteness. They end by insisting on the role of the institutional framework to enforce these contracts.
Jean Beuve, Stéphane Saussier, Julie de Brux
Regulatory Instruments for Public–Private Partnerships
Abstract
This chapter deals with ex ante and ex post mechanisms enabling to foster transparency and efficiency in PPPs as well as to limit information asymmetries. Ex ante, the authors discuss the advantages and drawbacks of the different award mechanisms. Ex post, they present control and performance incentive tools, with a focus on benchmarking mechanisms.
Lisa Chever, Aude Le Lannier
The Evolution of Financing Conditions for PPP Contracts: Still a Private Financing Model?
Abstract
This chapter tackles the issue of private financing. After explaining the rationale behind the private financing models that favored the emergence of public–private partnerships, the author describes the evolution of the financing conditions following the 2008 crisis. He presents some financing tools that have enabled to overcome the new constraints while limiting the additional costs of private financing.
Frédéric Marty

An Empirical Analysis of PPPs

Frontmatter
The Relative Efficiency of Competitive Tendering
Abstract
In this chapter, the authors describe the most commonly used award procedures to select a private partner. They present the results of empirical research papers investigating the determinants of the choice of award procedures and the efficiency of these procedures. This enables to discuss the conditions of appropriateness of the different award mechanisms, depending on the complexity of the project and the uncertainty of the environment.
Laure Athias, Lisa Chever
Renegotiating PPP Contracts: Opportunities and Pitfalls
Abstract
This chapter reflects the double-sided view of the economic literature on contract renegotiation. The authors first describe opportunistic behaviors and the solutions to limit them. Second, they present renegotiation as a way to tackle necessary adaptation and incompleteness issues. They identify the contractual and institutional conditions enabling to favor efficient and balanced contracts life span.
Jean Beuve, Aude Le Lannier, Zoé Le Squeren
Comparative Performances of Delivery Options: Empirical Lessons
Abstract
In this chapter, the authors propose a review of the empirical results on the relative performance (in terms of price and service quality in particular) of outsourced solutions, compared to traditional in-house delivery of public services. It also questions the role of the competitive pressure and of the choice of the type of contract to explain the relative performance. The results they present are based on articles dealing with varied sectors (water, prisons, transport, waste treatment, etc.) and varied institutional frameworks.
Miguel Amaral, Eshien Chong, Stéphane Saussier
Horizontal and Vertical Agreements in PPPs
Abstract
This chapter deals with corruption, favoritism, and collusion practices that economists call horizontal and vertical agreements. The authors first introduce the organization of such agreements, how damageable they are, and the way one can fight against these practices. Then, they propose to focus on the auction theory and mechanism design as a way to prevent vertical and horizontal agreements. Indeed, when it comes to complex contracts such as PPPs, negotiated procedures or adaptation of traditional procedures have the potential both to ensure competition and to provide the necessary flexibility to deal with skills and information asymmetries. The authors insist on the need of a robust institutional framework to ensure the credibility of ex ante mechanisms as well as of ex post sanctions.
John Moore, Carine Staropoli
Metadata
Title
The Economics of Public-Private Partnerships
Editors
Prof. Stéphane Saussier
Ph.D. Julie de Brux
Copyright Year
2018
Electronic ISBN
978-3-319-68050-7
Print ISBN
978-3-319-68049-1
DOI
https://doi.org/10.1007/978-3-319-68050-7