Riess, Armin () (European Investment Bank, Economic and Financial Studies)
Abstract
Focussing on two key features of a PPP - the bundling of construction and operation of an infrastructure asset, for one, and private ownership for another - this paper argues that the PPP model is suitable for some public services but not for others. While the incentive-oriented mechanism of bundling and private ownership fosters cost savings in the provision of public services, such savings might come at the expense of public-interest objectives, which - after all - set public services apart from private goods and services. The challenge then is to find out whether the conditions for cost savings to outweigh departures from public-interest objectives are more likely to exist for some services than for others. This paper answers affirmatively, putting the ease (or difficulty) of contracting on public services - notably their publicinterest objectives - at the heart of the argument.
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Publisher Info
Paper provided by European Investment Bank, Economic and Financial Studies in its series EIB Papers with number
6/2005.
Find related papers by JEL classification: D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis H40 - Public Economics - - Publicly Provided Goods - - - General H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
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