The Risks and Tricks in Public–Private Partnerships

Elisabetta Iossa, Giancarlo Spagnolo and Mercedes Vellez

Chapter 16 in The Analysis of Competition Policy and Sectoral Regulation, 2014, pp 455-489 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Public–Private Partnerships (PPPs) have been implemented broadly around the world in the infrastructure sector — water and sanitation, transports, energy, telecommunications — and, more recently, in the provision of public services — education, health, prisons, water and waste management. Key aspects of the contract design, such as risk allocation and payment mechanisms, significantly affect the PPP outcomes because they affect the incentives of the public and private parties to deliver a public service that satisfies user needs. Nevertheless, contractual provisions used in practice often do not implement the efficient risk allocation. In this chapter, we discuss the crucial role of the public sector in designing and imposing standardized contracts, monitoring their compliance, disclosing contractual information to the general public, and transferring risks to the private sector in order to reduce the likelihood of PPP performance failure.

Keywords: Competition Policy; Sectoral Regulation; Pattern Asymmetry; Market Consolidation; Grocery Retailing; Pricing Developments; Industry Structure; Price Effects of Mergers; Input Price Shocks; Quantity Discounts (search for similar items in EconPapers)
Date: 2014
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Working Paper: The Risks and Tricks in Public-Private Partnerships (2013)
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