The EU Policy Towards PPPs: A New Institutional Economics Perspective

A. Marran

Competition and Regulation in Network Industries, 2007, vol. 8, issue 3, 261-282

Abstract: The purpose of this paper is to clarify the economic worthiness of the service concession to mixed companies (iPPP), which represents a form of partnership substantially neglected by economic literature. Our underlying objective is to provide New Institutional Economics with some evidence to show how such a theory could contribute to attain further and concrete advances in local utilities regulation. Beyond the competitive tendering for selecting the provider or the private partner, execution drawbacks arising during the concession contract need to be approached in a more rigorous way: opportunistic behaviours and moral hazard will affect negatively the outcome of PPPs as well as non-transparent and non-objective award procedures. IPPP has been carrying out a fundamental function in regulating local utilities, in as much its particular structure allows the public sector to maintain an insider's point of view over the service management and represents an extraordinary instrument to cope with the shortcomings arising from private opportunistic conducts.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sen:journl:v:8:i:3:y:2007:p:261-282

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