Economics at your fingertips  

Traditional Procurement versus Public–Private Partnership: A Comparison of Procurement Modalities Focusing on Bundling Contract Effects

Hojun Lee and Kiwan Kim

Working Papers from eSocialSciences

Abstract: This paper studies the optimal structure of procurement contracts between public and private sectors by mainly comparing two typical procurement types: traditional procurement and public–private partnership (PPP). It first sets up a principal–agent model focusing on bundling effects of procurement based on Hart (2003), and Iossa and Martimort (2015) to see under which conditions PPP has advantages over traditional procurement and vice versa. Then, it considers if the Republic of Korea’s PPP structure in practice is well designed to maximize efficiency regarding the theoretical model. By reviewing the data on major investors and equity transactions of the Republic of Korea’s PPP projects, it also shows that the bundling effects of PPP contracts, which is one of the main sources of efficiency, is limited under the current economic and political environment and derive policy implications for developing countries implementing PPP projects in the region.

Keywords: eSS; traditional procurement; Public–Private Partnership (PPP); procurement contracts; public sector; private sector; principal–agent; Republic of Korea; economic; environment; political; policy implication; PPP projects. (search for similar items in EconPapers)
Date: 2018-09
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... AId=12928&fref=repec

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from eSocialSciences
Bibliographic data for series maintained by Padma Prakash ().

Page updated 2019-10-17
Handle: RePEc:ess:wpaper:id:12928