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Public–private partnership: Difference between revisions
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{{Short description|Government/private company partnership}} | {{Short description|Government/private company partnership}} | ||
A '''public–private partnership''' ('''PPP''', '''3P''', or '''P3''') is a long-term arrangement between a government and [[private sectors|private sector]] institutions.<ref name="Hodge, G 2007 pp.54ku558">Hodge, G. A and Greve, C. (2007), Public–Private Partnerships: An International Performance Review, Public Administration Review, 2007, Vol. 67(3), pp. 545–558</ref><ref name=":1">{{Cite journal|last1=Roehrich|first1=Jens K.|last2=Lewis|first2=Michael A.|last3=George|first3=Gerard|title=Are public–private partnerships a healthy option? A systematic literature review|journal=Social Science & Medicine|volume=113|pages=110–119|doi=10.1016/j.socscimed.2014.03.037|pmid=24861412|year=2014|doi-access=free|hdl=10044/1/13799|hdl-access=free}}</ref> Typically, it involves [[private capital]] financing government projects and services up-front, and then drawing revenues from [[taxpayer]]s and/or users for profit over the course of the PPP contract.<ref>{{Cite book|title=Encyclopedia of the City|url=https://archive.org/details/encyclopediacity00cave|url-access=limited|last=Caves|first=R. W.|publisher=Routledge|year=2004|isbn=9780415252256|pages=[https://archive.org/details/encyclopediacity00cave/page/n591 551]}}</ref> Public–private partnerships have been implemented in [[Public–private partnerships by country|multiple countries]] and are primarily used for [[infrastructure]] projects. Although they are not compulsory, PPPs have been employed for building, equipping, operating and maintaining schools, hospitals, transport systems, and water and sewerage systems.<ref>{{Cite book|last=Bovaird|first=Tony|editor1-first=Tony|editor1-last=Bovaird|editor2-first=Elke|editor2-last=Loeffler|date=2015-09-25|title=Public Management and Governance|doi=10.4324/9781315693279|isbn=9781315693279|url=https://figshare.com/articles/online_resource/Public_Management_and_Governance/19476941 }}</ref> | A '''public–private partnership''' ('''PPP''', '''3P''', or '''P3''') is a long-term arrangement between a government and [[private sectors|private sector]] institutions.<ref name="Hodge, G 2007 pp.54ku558">Hodge, G. A and Greve, C. (2007), Public–Private Partnerships: An International Performance Review, Public Administration Review, 2007, Vol. 67(3), pp. 545–558</ref><ref name=":1">{{Cite journal|last1=Roehrich|first1=Jens K.|last2=Lewis|first2=Michael A.|last3=George|first3=Gerard|title=Are public–private partnerships a healthy option? A systematic literature review|journal=Social Science & Medicine|volume=113|pages=110–119|doi=10.1016/j.socscimed.2014.03.037|pmid=24861412|year=2014|doi-access=free|hdl=10044/1/13799|hdl-access=free}}</ref> Typically, it involves [[private capital]] financing government projects and services up-front, and then drawing revenues from [[taxpayer]]s and/or users for profit over the course of the PPP contract.<ref>{{Cite book|title=Encyclopedia of the City|url=https://archive.org/details/encyclopediacity00cave|url-access=limited|last=Caves|first=R. W.|publisher=Routledge|year=2004|isbn=9780415252256|pages=[https://archive.org/details/encyclopediacity00cave/page/n591 551]}}</ref> Public–private partnerships have been implemented in [[Public–private partnerships by country|multiple countries]] and are primarily used for [[infrastructure]] projects. Although they are not compulsory, PPPs have been employed for building, equipping, operating and maintaining schools, hospitals, transport systems, and water and sewerage systems.<ref>{{Cite book|last=Bovaird|first=Tony|editor1-first=Tony|editor1-last=Bovaird|editor2-first=Elke|editor2-last=Loeffler|date=2015-09-25|title=Public Management and Governance|doi=10.4324/9781315693279|isbn=9781315693279|url=https://figshare.com/articles/online_resource/Public_Management_and_Governance/19476941 }}</ref> | ||
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==Definition== | ==Definition== | ||
There is no consensus about how to define a PPP.<ref name="Marta Marsilio 2011 pp.763-782">Marta Marsilio, M., Cappellaro, G and Cuccurullo, C. (2011), The Intellectual Structure Of Research Into PPPs, ''Public Management Review'', Vol 13 (6), pp.763–782</ref> The term can cover hundreds of different types of long-term contracts with a wide range of risk allocations, funding arrangements, and transparency requirements.<ref name="Hodge, G 2007 pp.54ku558"/> The advancement of PPPs, as a concept and a practice, is a product of the [[new public management]] of the late 20th century, the rise of neoliberalism, and [[globalization]] pressures. Despite there being no formal consensus regarding a definition, the term has been defined by major entities. | There is no consensus about how to define a PPP.<ref name="Marta Marsilio 2011 pp.763-782">Marta Marsilio, M., Cappellaro, G and Cuccurullo, C. (2011), The Intellectual Structure Of Research Into PPPs, ''Public Management Review'', Vol 13 (6), pp.763–782</ref> The term can cover hundreds of different types of long-term contracts with a wide range of risk allocations, funding arrangements, and transparency requirements.<ref name="Hodge, G 2007 pp.54ku558"/> The advancement of PPPs, as a concept and a practice, is a product of the [[new public management]] of the late 20th century, the rise of neoliberalism, and [[globalization]] pressures. Despite there being no formal consensus regarding a definition, the term has been defined by major entities. | ||
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The late 20th and early 21st century saw a clear trend toward governments across the globe making greater use of various PPP arrangements.<ref name=":1" /> Pressure to change the model of public [[procurement]] was associated with the [[Neoliberalism|neoliberal]] turn. Instigators of the policy portrayed PPPs as a solution to concerns about the growing level of [[public debt]] during the 1970s and 1980s. They sought to encourage private [[investment]] in [[infrastructure]], initially on the basis of ideology and [[accounting]] fallacies arising from the fact that public accounts did not distinguish between recurrent and capital expenditures.<ref name=":0" />{{rp|chapter 1}} | The late 20th and early 21st century saw a clear trend toward governments across the globe making greater use of various PPP arrangements.<ref name=":1" /> Pressure to change the model of public [[procurement]] was associated with the [[Neoliberalism|neoliberal]] turn. Instigators of the policy portrayed PPPs as a solution to concerns about the growing level of [[public debt]] during the 1970s and 1980s. They sought to encourage private [[investment]] in [[infrastructure]], initially on the basis of ideology and [[accounting]] fallacies arising from the fact that public accounts did not distinguish between recurrent and capital expenditures.<ref name=":0" />{{rp|chapter 1}} | ||
In 1992, the [[Conservative Party (UK)|Conservative]] government of [[John Major]] in the | In 1992, the [[Conservative Party (UK)|Conservative]] government of [[John Major]] in the United Kingdom introduced the [[Private finance initiative]] (PFI),<ref name="RP01-117">{{cite web|last1=Allen|first1=Grahame|title=The Private Finance Initiative (PFI) Commons Briefing papers RP01-117|url=http://researchbriefings.files.parliament.uk/documents/RP01-117/RP01-117.pdf|website=UK Parliament: House of Commons Library|publisher=UK Government|access-date=20 January 2018|ref=RP01-117}}</ref> the first systematic program aimed at encouraging public–private partnerships. The 1992 program focused on reducing the [[public sector borrowing requirement|public-sector borrowing requirement]], although, as already noted, the effect on public accounts was largely illusory. Initially, the private sector was unenthusiastic about PFI, and the public sector was opposed to its implementation. In 1993, the [[Chancellor of the Exchequer]] described its progress as "disappointingly slow". To help promote and implement the policy, Major created institutions staffed with people linked with the [[City of London]], [[accountancy]] and [[consultancy]] firms who had a vested interest in the success of PFI. | ||
[[File:Tony Blair in 2002.jpg|thumb|During his first term in office, Tony Blair made public-private partnerships the norm for government procurement projects in the United Kingdom.]] | [[File:Tony Blair in 2002.jpg|thumb|During his first term in office, Tony Blair made public-private partnerships the norm for government procurement projects in the United Kingdom.]] | ||
Around the same time, PPPs were being initiated haphazardly in various [[OECD]] countries. The first governments to implement them were ideologically [[Neoliberalism|neoliberal]] and short on [[Government revenue|revenues]]: they were thus politically and fiscally inclined to try out alternative forms of public procurement. These early PPP projects were usually pitched by wealthy and politically connected [[business magnate]]s. This explains why each countries experimenting with PPPs started in different [[Economic sector|sectors]].<ref name=":0" /> At that time, PPPs were seen as a radical reform of government service provision.<ref name=":5">{{Cite journal|last1=Franceys|first1=Richard|last2=Weitz|first2=Almud|date=November 2003|title=Public-private community partnerships in infrastructure for the poor|url=https://onlinelibrary.wiley.com/doi/10.1002/jid.1052|journal=Journal of International Development|language=en|volume=15|issue=8|pages=1083–1098|doi=10.1002/jid.1052|issn=0954-1748}}</ref> | Around the same time, PPPs were being initiated haphazardly in various [[OECD]] countries. The first governments to implement them were ideologically [[Neoliberalism|neoliberal]] and short on [[Government revenue|revenues]]: they were thus politically and fiscally inclined to try out alternative forms of public procurement. These early PPP projects were usually pitched by wealthy and politically connected [[business magnate]]s. This explains why each countries experimenting with PPPs started in different [[Economic sector|sectors]].<ref name=":0" /> At that time, PPPs were seen as a radical reform of government service provision.<ref name=":5">{{Cite journal|last1=Franceys|first1=Richard|last2=Weitz|first2=Almud|date=November 2003|title=Public-private community partnerships in infrastructure for the poor|url=https://onlinelibrary.wiley.com/doi/10.1002/jid.1052|journal=Journal of International Development|language=en|volume=15|issue=8|pages=1083–1098|doi=10.1002/jid.1052|issn=0954-1748}}</ref> | ||
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| first = Severin | | first = Severin | ||
| title = Power cut leaves surgeons operating by torchlight at PFI hospital | | title = Power cut leaves surgeons operating by torchlight at PFI hospital | ||
| journal = | | journal = The Guardian | ||
| date = 21 April 2012}}</ref>}} | | date = 21 April 2012}}</ref>}} | ||
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[[Category:Construction management]] | [[Category:Construction management]] | ||
[[Category:Securities (finance)]] | [[Category:Securities (finance)]] | ||
[[Category:Concepts]] | |||