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Public-private Partnerships, Commitment and X-Inefficiency

Author

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  • Indrani Roy Chowdhury

    (Jawaharlal Nehru University)

  • Prabal Roy Chowdhury

    (Indian Statistical Institute, Delhi)

Abstract

We examine the formation of public private partnerships (PPPs), one of the most important organisational forms to evolve over the last few decades. Given the volume of infra-structural investment required, PPPs seem essential for India’s development. We unearth a role for PPP formation that is new in the literature, namely its role as a commitment device. In particular, we argue that the presence of the private firm allows a PPP to credibly commit to discontinuing the project when efficiency considerations demand so

Suggested Citation

  • Indrani Roy Chowdhury & Prabal Roy Chowdhury, 2018. "Public-private Partnerships, Commitment and X-Inefficiency," Discussion Papers 18-04, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:18-04
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    References listed on IDEAS

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    1. David Martimort & Flavio Menezes & Myrna Wooders & ELISABETTA IOSSA & DAVID MARTIMORT, 2015. "The Simple Microeconomics of Public-Private Partnerships," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(1), pages 4-48, February.
    2. Iossa, Elisabetta & Martimort, David, 2016. "Corruption in PPPs, incentives and contract incompleteness," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 85-100.
    3. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-643, December.
    4. Frédéric Blanc-Brude & Hugh Goldsmith & Timo Välilä, 2009. "A Comparison of Construction Contract Prices for Traditionally Procured Roads and Public–Private Partnerships," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 19-40, September.
    5. Dunleavy, Patrick, 1985. "Bureaucrats, Budgets and the Growth of the State: Reconstructing an Instrumental Model," British Journal of Political Science, Cambridge University Press, vol. 15(3), pages 299-328, July.
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