An overview of economic theory and evidence of public-private partnerships in the procurement of (transport) infrastructure

Public-private partnerships (PPP) to construct infrastructure assets and to deliver the associated services emerged in their modern form in the UK in the 1990s. Although their quantitative significance has remained limited, a rich economic-theoretical PPP literature has emerged. In particular, the trade-off between allocative and productive efficiency has been extensively analysed in contract-theoretical literature. The empirical literature comparing PPP procurement with traditional public procurement is, however, scant. It may be futile to expect any simple empirical conclusions ever to emerge, and the thin evidence base means that public procurement decisions are strongly influenced by considerations other than economic efficiency.