Some Theory, Some Ideology and Lots of Pragmatism in the Cost-Benefit Analysis of PPPs
AbstractThis paper reviews the theoretical debates on the extent to which PPP demands changes in how cost-benefit analysis needs to be conducted for public projects. It presents first a simple conceptual discussion which shows that the comparison between PPP and public procurement boils down to: (i) the difference between the discount rate and the total cost difference between the best PPP bid and the best public sector option (including in the cost difference the allocation of operational risks and the likelihood of these risks). It then looks at international practice and shows that pragmatism, and sometimes ideology, dominates theory in the use of cost benefit analysis to compare the two forms of provision.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers ECARES with number ECARES 2012-027.
Length: 21 p.
Date of creation: Aug 2012
Date of revision:
Publication status: Published by:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-PPM-2012-09-09 (Project, Program & Portfolio Management)
- NEP-TRE-2012-09-09 (Transport Economics)
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