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When to Partner for Public Infrastructure?

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  • Jan Whittington

Abstract

Problem, research strategy, and findings: Public agencies traditionally request bids and award contracts to private firms after infrastructure designs are complete (bid-build). They also increasingly partner with private firms, often by folding capital improvements into a contract to design and build (design-build). The latter involves much more than the mere transfer of design work to the private sector, such as time to completion; the merits or problems of design-build strategies can, thus, be difficult to isolate. This article presents a method for doing so. Together with the development of a theory of contracting, the comparative analysis of two very similar highway overpass projects, one design-build and the other bid-build, demonstrates how so-called transaction cost economics can clarify the details of partnership cost-effectiveness. Takeaway for practice: Transaction cost analysis disaggregates and evaluates the costs of completed projects, accounting for factors typically external to economic analysis. My approach reveals tradeoffs between variables of interest to planners, such as the pace of delivery, public participation, environmental compliance, and the transfer of risk of cost overrun to the private sector. Research support: This research was made possible by a grant from the University of California Transportation Center, shared with Professor David Dowall.

Suggested Citation

  • Jan Whittington, 2012. "When to Partner for Public Infrastructure?," Journal of the American Planning Association, Taylor & Francis Journals, vol. 78(3), pages 269-285.
  • Handle: RePEc:taf:rjpaxx:v:78:y:2012:i:3:p:269-285
    DOI: 10.1080/01944363.2012.715510
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    Citations

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    Cited by:

    1. Zaigham Ali & Fangwei Zhu & Shahid Hussain, 2018. "Risk Assessment of Ex-Post Transaction Cost in Construction Projects Using Structural Equation Modeling," Sustainability, MDPI, vol. 10(11), pages 1-20, November.
    2. Gui, Emi Minghui & Diesendorf, Mark & MacGill, Iain, 2017. "Distributed energy infrastructure paradigm: Community microgrids in a new institutional economics context," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1355-1365.
    3. Willems, Jannes J. & Busscher, Tim & Woltjer, Johan & Arts, Jos, 2018. "Co-creating value through renewing waterway networks: A transaction-cost perspective," Journal of Transport Geography, Elsevier, vol. 69(C), pages 26-35.
    4. Verweij, Stefan & Meerkerk, Ingmar van, 2020. "Do public-private partnerships perform better? A comparative analysis of costs for additional work and reasons for contract changes in Dutch transport infrastructure projects," Transport Policy, Elsevier, vol. 99(C), pages 430-438.
    5. Cian O'SHEA & Dónal PALCIC & Eoin REEVES, 2019. "Comparing Ppp With Traditional Procurement: The Case Of Schools Procurement In Ireland," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(2), pages 245-267, June.
    6. Joshua Steinfeld & Ron Carlee & Kouliga Koala, 2020. "DBFOM Contracting and Public Stewardship in the Norfolk-Portsmouth Elizabeth River Tunnels Public-Private Partnership," Public Organization Review, Springer, vol. 20(1), pages 37-62, March.
    7. Chin, Jae Teuk, 2021. "The shifting role of public–private partnerships in vacant property redevelopment," Land Use Policy, Elsevier, vol. 105(C).
    8. Natalya Rakuta, 2015. "Life-Cycle Contracts in public procurement," Public administration issues, Higher School of Economics, issue 2, pages 53-78.

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