The Perceived Efficacy of Public-private Partnerships: A Study from Canada

Abstract

Since the 1990s, Public–Private Partnerships (P3s) have become a widely used public infrastructure financing policy tool. However, there is a vast body of evidence suggesting that they do not consistently deliver superior Value-for-Money (VfM), a central argument for engaging private industry partners. In response to the call by Andon (2012), we investigate the rationale behind governments’ continuing deployment of P3s, focusing on the factors affecting the nature and performance of P3s. We draw on contemporary institutional theory to explain the Alberta government’s deployment of P3s as a legitimate infrastructure delivery mechanism. While the P3 model has been beset by numerous problems, governments persist with P3 deployment. This practice is traced to institutional environmental forces that are set in motion to implement, sustain and institutionalize P3s as a ‘take it or no asset’ policy. Furthermore, we identify motivations tied to a new understanding of macro (group) and micro (private) interests that enact, sustain and institutionalize ‘preferred’ policy measures cloaked as ‘public interest’. Consistent with the current view of P3s as complex hybrid organizations that confront pluralistic circumstances, we argue that there is an absence of a reflective consideration among the invested local actors in balancing the competing stakeholder interests impacted by P3 policy. Furthermore, we outline the implications for the accounting industry as knowledge carriers in guiding the situated jurisdictional evolution of P3s, especially in recognition of the dual nature of P3s that are presented as objective decision models, but are context-driven and socially constructed as part of P3 policy adoption and implementation. Consequently, given the shifting political dynamics regarding the efficacy – and sustainability – of P3s, whether the end could be near for Alberta’s P3 experiment or a temporary hiatus is an open question that this paper will attempt to address. Full paper available at https://doi.org/10.1016/j.cpa.2018.04.004

Keywords: Public-private partnerships, P3, Institutional theory, Value-for-money, Traditional infrastructure procurement, Interpretive accounting, Critical accounting