Public-private partnerships versus traditional procurement: An experimental investigation

Patrick Schmitz, Eva Hoppe and David Kusterer

No 8167, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: A government agency wants an infrastructure-based public service to be provided. Our experimental study compares two different modes of provision. In a public-private partnership, the two tasks of building the infrastructure and operating it are delegated to one private contractor (a consortium), while under traditional procurement, these tasks are delegated to separate contractors. We find support for the theoretical prediction that, compared to traditional procurement, a public-private partnership provides stronger incentives to make cost-reducing investments (which may increase or decrease service quality). In two additional treatments, we study governance structures which explicitly take subcontracting within private consortia into account.

Keywords: Experiment; Incomplete contracts; Procurement; Public-private partnerships (search for similar items in EconPapers)
JEL-codes: D86 H11 L33 (search for similar items in EconPapers)
Date: 2010-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Public–private partnerships versus traditional procurement: An experimental investigation (2013)
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