Power relations and risk allocation in the governance of public private partnerships: A case study from China

Abstract

This article examines the power relations between the government, the private sector and citizens/users, which underlie the risk allocation process in public private partnerships (PPPs) for infrastructure. It argues that the institutional environment and resource dependency determine power relations, and hence risk allocation. The approach is applied to analyse risk allocation in a PPP toll road in Zhejiang province, China. The analysis reveals the dynamic of power relations among the parties. The findings show how the party with more power (in this case, the local government) was able to shift costs to the weaker parties (in this case, the users and the private sector). The implication of the study is that more effective courts and greater accountability of government to citizens are required to enhance the governance of such PPPs in China.