Is the PPP model applicable across sectors?

Armin Riess ()

No 6/2005, EIB Papers from European Investment Bank, Economics Department

Abstract: Focussing on two key features of a PPP - the bundling of construction and operation of an infrastructure asset, for one, and private ownership for another - this paper argues that the PPP model is suitable for some public services but not for others. While the incentive-oriented mechanism of bundling and private ownership fosters cost savings in the provision of public services, such savings might come at the expense of public-interest objectives, which - after all - set public services apart from private goods and services. The challenge then is to find out whether the conditions for cost savings to outweigh departures from public-interest objectives are more likely to exist for some services than for others. This paper answers affirmatively, putting the ease (or difficulty) of contracting on public services - notably their publicinterest objectives - at the heart of the argument.

Keywords: public-private partnerships; economic sectors; incomplete contracts; ownership (search for similar items in EconPapers)
JEL-codes: D61 H40 H57 L33 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2005-06-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:eibpap:2005_006

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