Public-private partnerships: market development through management reform

Abstract

The transformation of public infrastructure and services into vehicles of profit-making through privately financed and operated partnerships (PPPs) has successfully weathered high profile project failures, changes in government, scathing audits, public resistance, financial crises, fiscal austerity, and found a home around the world despite vastly different legal, cultural, and institutional contexts. Public procurement and traditional budgeting practices are now a distant memory in many jurisdictions – not by happenstance but through dogged efforts to transform public sectors from service provider into commodity purchaser. Understanding the political economy of global PPP markets requires knowing the connection to managerialism underpinning the story of public administration as contract management. This paper explores the emergence, sophistication, and normalization of PPP using primary and secondary sources including interviews with those involved in, or keenly aware of, the historical creation of pioneering PPP markets. It identifies three apposite categories of PPP management: models, methods, and mindsets. Models are homogenously portable yet malleable templates for partnering. Methods include accounting treatment and standards, and new budgeting and tendering practices. Mindsets are the ideas and ideals initially spread by enthusiasts like the Big Five consultancy firms and Macquarie Bank, later entrenched through specialized quasi-public agencies such as Partnerships UK and the World Bank’s PPIAF.