Public-Private Partnerships as New Form of Governing and Alternative to State Management: Theoretical Origins and Conceptual Influences

Abstract:     
Throughout the recent years, the public-private partnerships (P3s) have redefined the relationship between the public and the private sectors. Expanding rapidly, the approach has been used mostly by governments facing budgetary constraints. It aims at helping the public sector to benefit from commercial dynamic, innovation and efficiency. Private investors contribute their own capital, skills and experience. In addition, P3s provide better value for money, that is, within the resources available, governments can deliver higher quality services. Therefore, P3s are becoming an essential tool for the economic coordination of the state's activities. Yet, their theoretical basis and conceptual influences remain vague. This paper analyzes the main theoretical frames in which the P3s can be integrated. The different economic theories of the firm help to better understand why governments tend to concentrate on their kingly functions of stimulation and structure, while allowing the private sector to finance the public infrastructures and to deliver some services.

Keywords: Public-private partnerships, contracting-out, alternative service delivery, public services

JEL Classification: D23, H1, L3

Accepted Paper Series