Why Public–Private Partnerships Fail: A Structural Diagnosis of Capital Misalignment

Public--private partnerships remain a dominant instrument for financing public infrastructure despite three decades of documented cost overruns, renegotiations, service degradation and public backlash. Existing critiques are empirical, ideological or managerial, and share one assumption: that failure is contingent — on contract quality, public-sector capability or political context — and therefore correctable. This paper argues that PPPs fail structurally. Public-good systems are governed by mission cycles — asset lifetimes, capability renewal intervals, intergenerational service obligations — unfolding over decades. PPP capital is governed by return cycles, refinancing windows, renegotiation risk and contractual termination horizons. Forcing the two together does not produce hybrid efficiency; it produces systematic misalignment. Two failures follow and neither is an implementation problem. PPPs do not decouple capital from political, financial, capability and civic fragility, and they optimise cashflow timing rather than mission-aligned performance — so embedded extraction is not a side effect but the reason private capital participates at all. Capital designed to be recovered and exited cannot regenerate, because regeneration requires capital that stays. ⭠The paper's method is a control case: historic public benefaction, where durable public goods were in fact delivered. Durability there came not from donor virtue but from architectural features that insulated capital from budgeting cycles and political turnover — which establishes that the problem is soluble and locates the failure in the architecture rather than the ambition. PPP reform is therefore a dead end. Better contracts cannot repair a capital structure whose returns must be extracted on a schedule the mission does not share.