What can behavioural science teach us about the policy settings for privately financed public infrastructure?

Sebastian Zwalf

Chapter 7 in A Research Agenda for Public–Private Partnerships and the Governance of Infrastructure, 2022, pp 129-147 from Edward Elgar Publishing

Abstract: Drawing upon fields including sociology, psychology and economics, the emerging discipline of behavioural science has become increasingly relevant for explaining the drivers behind human decision making. This chapter considers the history, theory and application of behavioural science and applies it to the decision making behind the policy setting for public private partnerships (PPPs). In doing so it seeks to answer a charge that is implied by a range of PPP scholars; why is it that despite the alleged shortcomings of PPPs governments have embraced them as a preferred infrastructure delivery model? The chapter considers a number of drivers that scholars have attributed to governments' commitment to PPPs and applies a behavioural science lens to them. It argues that there is a case that governments have exhibited the characteristics of many 'behavioural science' themes; accepting markets as a social and policy norm; being influenced by international and interstate policy transfer; by framing PPP alternatives in a negative light; by preferring early pay-offs when faced with intertemporal choices; by showing a preference for project certainties; and having an aversion to outright losses. However, it also argues that such decision making would equally show that democratic governments are responsive to community attitudes, values and preferences. The chapter concludes by cautioning that a new frontier of empirical research must be completed to determine the accuracy of these hypotheses.

Keywords: Economics and Finance; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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