Public-Private Partnerships as Collaborative Projects: Testing the Theory on Cases from EU and Russia

Vinogradov, D. and Shadrina, E. (2016) Public-Private Partnerships as Collaborative Projects: Testing the Theory on Cases from EU and Russia. Working Paper. Essex Finance Centre.

Abstract

Public-private partnerships (PPP) allow involvement of private parties in the provision of public goods. How does this differ from traditional public procurement? We view PPPs as collaborative projects with information frictions. Typical public procurement contracts tackle the problems of asymmetric information. However, not all projects are contractible; some are not profitable enough to ensure participation of the private partner. This is due, in part, to costly information verification, and in part to the profitability requirements of the private party. We demonstrate what specific features of a partnership can improve feasibility of projects, and thus both provide a justification of PPP as a form of public good provision, and demonstrate how and whether it differs from procurement. We then analyse real life examples of PPP projects from the perspective of optimal choice of contracts, involvement of both partners, and the features that make these PPP arrangements superior to public procurement.

• Item Type: Research Reports or Papers (Working Paper)
• Additional Information: Working Paper No 6: 02-2016
• Status: Published
• Glasgow Author(s) Enlighten ID: Vinogradov, Professor Dmitri
• Authors: Vinogradov, D., and Shadrina, E.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Publisher: Essex Finance Centre
• Copyright Holders: Copyright © 2016 The Authors
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher