Efficient Public-Private Partnerships

43 Pages Posted: 20 Sep 2010 Last revised: 22 Oct 2010

See all articles by Marian W. Moszoro

Marian W. Moszoro

Warsaw School of Economics (SGH); International Monetary Fund (IMF); George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES)

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Date Written: October 20, 2010

Abstract

This paper presents a model to assess the efficiency of the capital structure in public-private partnerships (PPP). A main argument supporting the PPP approach for investment projects is the transfer of managerial skills and know-how from the private partner to the investment vehicle. The paper shows how different managerial skills and knowledge transfer schemes determine an optimal shareholding structure of the PPP. Under the assumption of lower capital cost of the public partner and lower development outlays when the investment is carried out by a private investor, an optimal capital structure is achieved with both the public and the private parties as shareholders, i.e. a mixed public-private capital structure allows to internalize the financial advantage of the public sector and the managerial advantage of the private sector.

Keywords: Public-Private Partnerships, Joint Ventures, Public Investment Policy, Knowledge Transfer, Hybrid Governance Structures

JEL Classification: D23, G32, H43, H54, L19

Suggested Citation

Moszoro, Marian W., Efficient Public-Private Partnerships (October 20, 2010). Available at SSRN: https://ssrn.com/abstract=1679993 or http://dx.doi.org/10.2139/ssrn.1679993

Marian W. Moszoro (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
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George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
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HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

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George Mason University
Fairfax, VA 22030
United States

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