PUBLIC-PRIVATE PARTNERSHIPS: Balancing Financial Returns, Risks, and Roles of the Partners

Abstract

This article examines the interrelation among financial returns, financial risk, and roles of the partners in public-private partnerships formed to provide local and state government functions. A balanced model of structuring public-private partnerships for purposes of comparison and discussion is offered. Then, selected functional categories of government (e.g., health and human services) are examined to determine the following for each category: (a) the social outcome objective of this functional category, (b) the general degree of financial return and financial risk that would normally be expected for such ventures, (c) the prevailing nature of managerial involvement of both parties in the partnership, and (d) the degree of conformance (or lack thereof) with the balanced model of structuring public-private partnerships. We argue that the more that public- private arrangements deviate from the balanced structural model, the greater the burden on decision makers to demonstrate that an overriding social purpose exists that justifies that deviance.