Governance Of Public-private Partnerships Research Articles

Determinants of public-private partnership governance structures: evidence from India

ABSTRACT Public-private partnerships (PPPs) represent a continuum of governance structures characterized by wide variability in private sector risk transfer. Despite the widespread adoption of PPPs, few studies examine the reasons for such heterogeneity. We investigate the factors explaining variability across PPP governance structures and their impact on the extent of private sector risk transfer using ordinal logistic regression on a novel dataset of 2330 Indian PPP projects. We find that the risk transfer is mainly driven by economic and fiscal factors, service-specific transaction costs and project-specific factors, while political factors and institutional quality barely influence it.

Performance controls and accountability in African transport infrastructure megaprojects: A systematic literature review

Poor performance is common in the delivery of large-scale transport infrastructure. Despite previous studies examining the management of transport megaprojects, there is a lack of systematic reviews on performance Controls and Accountability in Megaprojects (CAMP). We analyze research on CAMP in Africa. Out of the 947 records retrieved, 35 articles published between 1980 and 2022 meet our inclusion criteria. We identify four main research themes: “project governance,” “performance management,” “project conceptual management,” and “complexity management.” Our findings indicate significant weaknesses in project governance and a lack of proper project conception. Practical implications involve restructuring project governance policies and implementing a multi-level project governance model. The research supports recognizing corruption as a characteristic of megaprojects, implementing project governance as a standard management practice, and improving governance in public-private partnerships. Additionally, future research should prioritize integrating and developing policies, strengthening institutions, implementing participatory governance mechanisms, and building capacity for project management.

The effects of contractual and relational governance on public‐private partnership sustainability

AbstractThe study investigates how contractual and relational governance influence partner behaviors and promote sustainability performance of infrastructure public‐private partnerships (PPPs). Survey data from 217 Chinese PPP projects were analyzed using partial least squares structural equation modeling. This study found that both contractual and relational governance have positive effects on PPP sustainability, with contractual governance having a stronger impact. Contractual governance complements relational governance in promoting cooperative behavior, but relational governance does not amplify the effect of contractual governance on opportunistic behavior. The findings highlight the role of contracts in curbing opportunism and promoting collaboration via multiple functions of control, coordination, and adaption, while also revealing the limitations of relational approaches in the context of government‐business relationships and performance ambiguity. This study contributes to the PPP governance literature by uncovering the individual and interactive effects of contractual and relational governance on the economic, social, and environmental aspects of PPP sustainability.

The Institutional Dimension of Public-Private Partnerships: Governance

Failure to realize governance objectives is considered to be one of the reasons why public-private partnerships have become increasingly controversial and why there have been many negative experiences during the project process. This study examines the relationship between public-private partnerships and governance. In the framework pioneered by international organizations and accepted in the literature, it is possible to eliminate many problems experienced in public-private partnership projects by implementing governance principles. On the other hand, although there are many discussions in the literature on the conceptual basis of governance, there are no studies that address these conceptual debates within the framework of public-private partnerships. It is thought that this deficiency in the literature will also leave the discussions on the present and future of the relationship between public-private partnerships and governance incomplete. The originality of this study is that it evaluates the concept of governance in public-private partnerships and its foundations based on the New Institutional Economics and New Public Management approaches. When the concept is considered together with its foundations, the question of whether governance principles can really be a solution to the problems of public-private partnerships becomes controversial. Although the focus of the study is not on this debate, it aims to open the door to further discussions on the subject.

The effects of governance on performance: the case of Public–Private Partnership (PPP) toll roads in Indonesia

This article examines how contract model selection shapes PPP governance, which may affect the construction performance of PPP Toll Roads in Indonesia. This study compares the performance of PPP contracts used to build the 49 toll road projects, i.e. the Build-Operate-Transfer (BOT), Supported BOT (SBOT) and Design-Build-Finance-Operate-Maintenance (DBFOM) contracts. Using an Instrumental Variable Two-Stage Least Squares Regression (IV-2SLS) approach, this study discovers that SBOT contracts have lower costs and shorter completion times than BOT contracts due to a better incentive structure, which includes not only various government supports but also stronger control mechanisms in preparation, monitoring and audit. Meanwhile, using an OLS regression, DBFOM contracts have lower costs and shorter completion times than BOT contracts because private firms were able to better internalize externalities and perform better design and monitoring because they were in charge of the planning from the beginning. These findings suggest that the choice of contract has significant effects on the construction performance of PPP and transaction cost minimization is one of the keys to consider in the selection of PPP contract governance, especially to anticipate cost overrun and time delay risks.

A systematic review of the interrelation of administrative, Environmental, Social and Governance of Public-Private Partnerships (PPP) Spaceport Project in Biak, Papua, Indonesia

This paper aims to explain the administrative and the Environmental, Social and Governance (ESG) of the Indonesian Spaceport Project in Biak, Papua, Indonesia, under the Public-Private Partnerships (PPP) scheme, particularly from the protest to fear of environmental damage and traditional rights. This paper analyzes the factors that cause the local society’s reluctance to accept the development of Indonesia’s very first commercial spaceport. This paper uses a doctrinal methodology, which examines changes in the trend of ESG in implementing PPP projects. The method used is a qualitative systematic review of national and international studies. This paper finds that the lack of legal certainty for administrative and ESG as the main factor contributing to the pitfall of the PPP project in Biak Papua. No clear Government Contracting Agency (GCA), plus the fact that the Indonesian government puts too much weight on business consideration in PPP while Papuan people need more ESG, especially considering the historical conflict in the region, has been the epicenter of the problem. Given the ESG-PPP regulatory failure of spaceport development in Biak, more focused studies using comparative study methodology are needed to propose a more robust and customized ESG in PPP regulations in a politically and historically sensitive area. The authors forward a regulatory reform to balance administration, ESG, and business considerations in PPP projects for a spaceport.

A multicriteria decision framework for governance of PPP projects towards sustainable development

The lack of a suitable decision framework for the governance of public-private partnership (PPP) projects in Africa, especially Ghana, is a major setback to project success, retarding sustainable development. This study develops a hierarchical decision framework for prioritizing project governance factors and their relationships using the Decision Making Trial and Evaluation Laboratory (DEMATEL) method. We employ 30 experts to evaluate two main PPP governance factors and eleven subfactors. We found that contractual governance factors of PPP are more prominent than noncontractual ones for sustainable PPP projects. However, noncontractual governance factors have the highest net effect on contractual factors. Again, policy diffusion is the contractual factor with the highest net effect, while best practice team norm is the noncontractual factor with the highest net effect. Additionally, effective risk allocation is the most prominent contractual subfactor of PPP, while effective communication of project information is the most prominent noncontractual governance factor. The results imply that PPP project managers should improve governance factors for the sustainable development of PPP projects in Africa. However, they should emphasize the prominent and high net effect governance factors but not wholly disregard the less prominent ones.

Information systems change and public-private partnerships governance: Accelerators factors for discontinuing loosely coupled hospital management accounting practices

Information systems change and public-private partnerships governance: Accelerators factors for discontinuing loosely coupled hospital management accounting practices

State audit of public–private partnerships: Effects on transparency, auditor's roles, and impact on auditee's reactions

AbstractSupreme Audit Institutions (SAIs) play an active role in the government's accountability to the parliament. Public–private partnerships (PPPs) are a different route used to deliver infrastructure‐based public services by private sector entities compared to traditional public procurement. Due to their nature, PPPs raise specific issues related to transparency for public accountability and SAIs, through the independent and competent audit they provide, may enhance the information content of the accountability relationship between the government and the parliament. We conducted a documentary analysis of 16 PPP audit reports issued by the Portuguese Court of Auditors (CoA) to analyze the audit process and outputs. Overall, our evidence suggests that the CoA, through the audit reports, reduced the information asymmetry by disclosing relevant information for more comprehensive public scrutiny and political accountability of PPPs and made several recommendations towards better PPP governance and management. Furthermore, our findings corroborate the two functions of SAIs, which can both be found in the same audit report: the watchdog function (magistrate and public accountant roles), drawing attention to failures at different stages of the PPP cycle, and the shepherding function (management accountant role), providing advice to the Government towards best practices on PPP governance and management. Considering the Government's reactions to the audit reports and the information available about CoA's recommendations implementation, there are doubts about the desired audit impact on the auditee's change of PPPs governance and management.

Prospects and Challenges of Public-private Partnership Model for the Development of China's Infrastructure

The use of public-private partnerships (PPPs) for infrastructure development can alleviate the high levels of government debt associated with these projects while encouraging new investment as well. We developed a theoretical analysis of infrastructure projects and the applicability of PPPs. Next, we provided an empirical analysis based on statistics from the PPP database of the Ministry of Finance from 2013 to 2017. Based on our results, this paper offers reasonable and effective guidance for restructuring China’s PPP governance to improve the participation of government departments, the private sector, and the public in PPPs for infrastructure development.

Turkey’s public–private partnership experience: a political economy perspective

ABSTRACT Public–private partnerships (PPP) are the contractual arrangements between public and private parties to deliver infrastructure and services in which costs, risks, and benefits are shared. Good governance of PPPs, traditionally associated with an effective regulatory and institutional framework, appropriate risk-sharing, competitive and transparent procurement have recently been broadened to include citizens’ perspectives. Turkey uses PPPs to deliver public infrastructures such as airports, energy plants, highways, bridges, and hospitals. Our first section into Turkey’s PPP experience explores how the partnership between state and capital is instituted. We reveal nine crucial governance problems: Complexities of megaprojects, fragmented legal and regulatory framework, weak institutional capacity, risk-sharing discrepancies, poor value for money, non-affordable public services, lack of transparency, limited accountability, and disregard for environmental sustainability. We maintain that a deeper understanding of PPPs requires complementing this governance analysis with insights from critical political economy. Accordingly, we draw a critical political economy framework to explain why, when, and how PPPs in Turkey are utilized in our second section. We underline the neoliberal transformation and financialized capital accumulation dynamics. We argue that PPP projects have fuelled the construction-led economic growth model, distributed resources to pro-government capital groups, and reproduced political power in Turkey.

Contextual recipes for adopting private control and trust in public–private partnership governance

AbstractIn governing public–private partnerships (PPPs), transferring control rights to the private sectors and building trust among partners are recognized as solutions to improve efficiency and adaptability. However, what contexts would fit into the adoption of these solutions remains unclear. Building on the relevant literature on project attributes and project environments, this article divides the context into several crucial factors: asset specificity, project publicness, institutional completeness, market maturity, and regulatory quality. A fuzzy set qualitative comparative analysis (fsQCA) was conducted on 1378 PPP projects in developing countries to examine the contexts that support the outcomes of private control and trust. Six causal paths created by a mix of contextual conditions are found to be sufficient for the outcomes, to which certain factors make unique contributions. Knowledge of these paths and context configurations can help to match the context to the considered governance solutions, thereby contributing to successful PPP governance.

Mechanisms for protecting returns on private investments in public infrastructure projects

Despite the widespread attention for the private financing of infrastructure projects, actual empirical work on financing public-private partnerships remains limited. Especially the topics of return on equity and lenders’ cash flow control in relation to uncertainty are under-researched. The aim of this paper is to investigate and discuss the mechanisms applied by private financiers of infrastructure projects to protect their returns on investment. Using semi-structured interviews, the qualitative viewpoints of infrastructure financiers and their consultants on infrastructure investment are examined. The findings identify nine control mechanisms that financiers apply, including a range of asset and risk diversification portfolio strategies for their infrastructure investments, and reveal that they depend on governance mechanisms relating to the project environment, relations, knowledge and expertise. Hence, this study provides a better understanding of the actions and mechanisms applied to protect a return on infrastructure investments that leverage partnering strategies between public authorities and private investors in public infrastructure projects. This contributes to the debate on project financing under uncertainty and its implications for project governance in public private partnerships.

Public—Private Partnership Governance for Accessible Tourism in Marine Protected Areas (MPAs)

Tourism is a relevant sector in terms of social development, considering its contribution to the quality of life for people with special needs. Accessible tourism, by virtue of its complexity, requires the development of studies on the collaboration among different actors. This leads to this article’s research interest in the public—private partnership (PPP) as a managerial tool that allows cooperation and that can support the development of accessible tourism objectives in marine protected areas (MPAs). Applying the case study methodology, we investigate certain aspects characterizing PPPs governance. Answering the two proposed research questions, we conclude that (1) sharing similar moral values facilitates trust between the partners and (2) differing skills of the partners represent advantages in facing the complexity related to accessible tourism objectives.

Governance of Public–private partnerships in transportation infrastructure projects based on Thailand’s experiences

Public–private partnership (PPP) has been extensively applied in transportation infrastructure projects. The specific characteristics of PPP projects cause the allocation of risks and benefits among the public and private sectors, and in practice, multiple decision making processes based on public interest resulting governance problems. The need for private investment in transportation infrastructure projects urges governments to apply good governance practices to attract private investment. The purpose of this study is to examine PPP governance problems and applied practices so as to investigate the governance improvement of PPP transportation projects in Thailand. The findings represent the governance problems and practices applied in PPP transportation projects in Thailand. The discussion of the findings, in relation to the international PPP governance practices, reveals the gaps for further governance improvement in terms of policy, regulation, institution, and stakeholder. This study extends the investigation of PPP problems in transportation project implementation through the lens of governance little shown in previous studies. It contributes to government and local government a more in-depth understanding of governance problems and good practices to better govern the PPP transportation projects to achieve the project goals.

Fuzzy Synthetic Evaluation of the Critical Success Factors for the Sustainability of Public Private Partnership Projects in China

Public Private Partnership (PPP) projects have attracted wide attention from academia and industry over the past 20 years, however, they have been plagued by certain factors. This study identified, classified, and evaluated the success factors that may affect PPP projects for achieving sustainability. First, a list of 32 critical success factors were categorized into 3 groups, then a questionnaire survey was conducted, with 108 responses received from experts, researchers, and PPP project managers in China. Second, using a fuzzy synthetic evaluation (FSE) method, stakeholder relationships (A1–A10), external environmental (B1–B8), and project management of a special purpose vehicle (C1–C14) collected data at three different factor group locations in PPP projects were used in this evaluation. The results obtained nine top factors: private sector financing capacity, government credit, government commitment or guarantee, completeness of legal framework, available financial markets, the feasibility study report and implementation, effectiveness of risk management, project investment, and cost control and revenue distribution. It was demonstrated that fuzzy synthetic evaluation techniques are quite appropriate techniques for PPP projects. The research findings should impact on policy development towards PPP and Private Finance Initiative (PFI) project governance.

Epitomising Public Sector Management of Public Private Partnerships: A Trajectory of Good Governance

While research and policy documents seem to equate public private partnerships (PPPs) to a “marriage made in heaven”, globally they have had flimsy impact on public service delivery. Such seem to be caused by myopic governance emanating from scattered PPP governance literature, lack of a clear PPP good governance overview, as well as overemphasis of PPP financing over the wider PPP governance aspects. Using scholarly documents through content analysis, this study therefore intended to identify and examine the elements of a PPP governance system, and thereafter provide strategies of enforcing good governance practices for PPPs to serve their intended purpose. Findings indicate that PPP principles, critical success factors, stakeholder and risk management, and management of PPP maturity trends, make up a PPP good governance system. Finally, for each of the findings established, the study proposes appropriate good governance practices for sustainable PPP interventions.

The influence of governance on the implementation of Public-Private Partnerships in the United Kingdom and China: A systematic comparison

Although Public-Private Partnerships (PPPs) have been widely implemented in a number of countries, their development and governance contexts are different. This research investigates PPPs through the lens of governmentality and develops a systematic and innovative analytical framework to evaluate and compare the PPP governance in China and the United Kingdom. Based on the findings, a conceptual model is proposed to illustrate the conducting of PPP governance, by the governments involved. The research contributes to the literature on the governance of PPP by providing a clear framework and an assessment tool. The result can benefit the policymakers in different countries, in assessing and improving the efficiency and effectiveness of their PPP governance in practice, hence helping the decision-making of government in identifying and targeting loopholes in their PPP market.

PPP Development and Governance in Latin America: Analysis of Brazilian State PPP Units

AbstractGovernments have used public–private partnership (PPP) units to ensure that PPP programs and projects are successfully delivered. These units frequently are understaffed and vulnerable to p...

Using PPP to Procure Social Infrastructure: Lessons From 20 Years of Experience in Ireland

Ireland has almost two decades of experience with using public private partnerships (PPPs) for the procurement of social infrastructure such as schools, courthouses, and health facilities. This article focuses on Ireland’s schools sector where 27 school buildings with an estimated capital value of €500 million have been procured via PPP to date. We review the changes that have occurred to the governance of PPPs and supporting institutional structures, which have evolved considerably over the past 20 years. Evidence of policy learning has led to the development of detailed PPP guidelines and the establishment of a centralized PPP agency with responsibilities that exceed international norms. We highlight how the development of PPP institutions has been an ongoing and gradual process, which will continue to evolve if concerns in relation to accountability and transparency are to be addressed.