Issues of asymmetric information in public-private partnership contracts within Jordanian healthcare sector

Abstract

Public-private partnership (PPP) contract is a special type of governance. Under a PPP contract, a central-government agency or a local authority and a private agent bargain a long-term contractual agreement to build a public infrastructure or the providence of a public service, such that risks, returns and resources are optimally shared among partners. The health sector has applied such PPP schemes in the recent decades for two primary reasons: 1 lack of government budgetary support for the health sector and the search for an alternative source of funding 2 the emergence of privatisation in the health sector. However such schemes of contracts are fully related to issues of asymmetric information such as the problems of moral hazard, adverse selection and market for lemons. These problems undermine the shared optimal results of PPPs contracts. Jordanian Health sector has witnessed some healthcare cuts. The sector also endeavoured on such PPP contracts to lessen the deteriorating consequences of the health sector. This paper exposes the Jordanian experience of PPPs in the health sector. Related issues of asymmetric information are treated and some remedy propositions are advanced.