Public–private partnership
[1][2] Typically, it involves private capital financing government projects and services up-front, and then drawing revenues from taxpayers and/or users for profit over the course of the PPP contract.[4] Cooperation between private actors, corporations and governments has existed since the inception of sovereign states, notably for the purpose of tax collection and colonization.[7] The term can cover hundreds of different types of long-term contracts with a wide range of risk allocations, funding arrangements, and transparency requirements.For example, The OECD formally defines public–private partnerships as "long term contractual arrangements between the government and a private partner whereby the latter delivers and funds public services using a capital asset, sharing the associated risks".[11] A 2013 study published in State and Local Government Review found that definitions of public-private partnerships vary widely between municipalities: "Many public and private officials tout public–private partnerships for any number of activities, when in truth the relationship is contractual, a franchise, or the load shedding of some previously public service to a private or nonprofit entity."[5][14] Muhammad Ali of Egypt utilized "concessions" in the early 1800s to obtain public works for minimal cost while the concessionaires' companies made most of the profits from projects such as railroads and dams.[citation needed] In Newfoundland, Robert Gillespie Reid contracted to operate the railways for fifty years from 1898, though originally they were to become his property at the end of the period.[citation needed] The late 20th and early 21st century saw a clear trend toward governments across the globe making greater use of various PPP arrangements.[6]: chapter 1 In 1992, the Conservative government of John Major in the United Kingdom introduced the Private finance initiative (PFI),[17] the first systematic program aimed at encouraging public–private partnerships.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.[18] In 1997, the new British government of Tony Blair's Labour Party expanded the PFI but sought to shift the emphasis to the achievement of "value for money", mainly through an appropriate allocation of risk.This is because the PPP model promised to bring new sources of funding for infrastructure projects in transition economies, which could translate into jobs and economic growth.However, the lack of investor rights guarantees, commercial confidentiality laws, and dedicated state spending on public infrastructure in these countries made the implementation of public–private partnership in transition economies difficult.[23] Typically, a private-sector consortium forms a special company called a special-purpose vehicle (SPV) to develop, build, maintain, and operate the asset for the contracted period.Private monopolies created by PPPs can generate a rent-seeking behavior, which leads to spiraling costs for users and/or taxpayers in the operation phase of the project.In response to these negative findings about the costs and quality of P3 projects, proponents developed formal procedures for the assessment of PPPs which focused heavily on value for money.[48] In the United Kingdom, many private finance initiative programs ran dramatically over budget and have not provided value for money for the taxpayer, with some projects costing more to cancel than to complete.A paper in the British Medical Journal shows that before risk was costed, the hospital schemes it studied would have been built much more cheaply with public funds.The health board should now be seeking an exit from this failed arrangement with Consort and at the very least be looking to bring facilities management back in-house.[62] In the 2010s, as wastewater treatment plants across North America came of age and needed to be replaced, multiple cities decided to fund the renewal of their water infrastructure through a public–private partnership.Major transportation P3 projects have included the Confederation Bridge linking Prince Edward Island and New Brunswick, the Pocahontas Parkway in Virginia, and the London Underground PPP.[65] A health services PPP can be described as a long-term contract (typically 15–30 years) between a public-sector authority and one or more private-sector companies operating as a legal entity.Finally, the private sector receives payment for its services and assumes additional risk while benefitting from returns on its investments during the operational phase.These companies then went on to evaluate those procedures, appraise individual projects, and act as a consultants for private and public partners in PPP contract negotiations.[19] Due to these conflict of interests, multiple authors have argues that the "big four"'s public project appraisals are biased towards the PPP funding option against the traditional procurement model.These deals are usually done during periods of financial distress for the city, and the immediate revenues municipalities receive is used to pay down the debt or to fill budget holes.Existing GPPPs strive, among other things, to increase affordable access to non-generic essential drugs and vaccines in developing countries,[83] and to[84] promote handwashing with soap to reduce diarrhoea.The guidance also noted that, following the establishment of the IPPP entity, it would be free to bid for future public contracts in the same way as other businesses, but particular care would be needed to ensure that the award process remained transparent.[6]: chapter 5 Amy Sarcevic from Informa Australia notes that "to date, market-led proposals have had a relatively high failure rate".[18] They were notably proposed by the Asian Development Bank as early as 1991 as an "institutional reform ... to facilitate the participation of individuals, CBOs [community based organizations], other NGOs and the private sector" so that they become "actively involved in planning and management".
PPP (disambiguation)NeoliberalismAusterityBalanced budgetDenationalizationDeregulationEconomic freedomEconomic integrationEconomic interdependenceEconomic liberalizationForeign direct investmentFree marketsFree tradeGlobalizationIntellectual propertyLaffer curveMarketizationMarket economyMundell–Fleming modelPrivatizationSchool vouchersShock therapySingle marketStructural Adjustment ProgrammeSupranationalismTax cutsAustrian SchoolChicago SchoolMonetarismNeoclassicalSupply-sideTrickle-downFiscal conservatismFujimorismThatcherismThird WayNew DemocratsPositive non-interventionismReaganomicsRogernomicsEconomic liberalization in IndiaAssociation of Southeast Asian NationsBank for International SettlementsEuropean Central BankEuropean UnionFederal ReserveGreater Arab Free Trade AreaInternational Monetary FundMERCOSURNorth American Free Trade AgreementRegional Comprehensive Economic PartnershipWorld BankWorld Trade OrganizationMont Pelerin SocietyChicago boysWorld Economic ForumAdam Smith InstituteFriedrich HayekLudwig von MisesWalter LippmannLouis RougierMilton FriedmanJames M. BuchananAugusto PinochetMargaret ThatcherRonald ReaganYasuhiro NakasoneRoger DouglasAlan GreenspanHernando de SotoAlberto FujimoriBill ClintonAnti-capitalismAnti-globalizationAlter-globalizationAuthoritarian capitalismBlatcherismCriticism of capitalismCriticism of intellectual propertyMarket fundamentalismprivate sectorprivate capitaltaxpayersmultiple countriesinfrastructurecorporationsgovernmentssovereign statestax collectioncolonizationpublic administrationpublic sectoroutside their balance sheetinteresttransaction costsreturn on investmentinnovationaccountabilityGavin Newsomnew public managementState and Local Government Reviewsemanticcontracting outCanadian Union of Public EmployeesMuhammad Ali of Egyptconcessionselectric gridRobert Gillespie Reidprocurementneoliberalpublic debtinvestmentaccountingConservativeJohn MajorUnited KingdomPrivate finance initiativepublic-sector borrowing requirementChancellor of the ExchequerCity of Londonaccountancyconsultancyrevenuesbusiness magnatessectorsTony Blair