Towards a Principal-Agent Based Typology of Risks in Public-Private Partnerships
There is a strong economic rationale for close cooperation between the public and private sectors. This has resulted in a significant increase in the demand for the provision of public services through instruments combining public and private money such as public-private partnerships (PPPs or P3s). We describe these arrangements and explore how they can be analyzed using standard tools in economics (incentives and principal-agent theory). We discuss the implications of our approach in terms of identifying risks that are often overlooked before turining to the optimal risk-sharing between the public and private partners, in particular with respect to information asymmetries in risk perceptions. This allows us to propose a typology of the risks associated with PPPs, where both internal risks (the risks associated with the contract) and external risks (those associated with the project) are considered.
|Date of creation:||23 Sep 2009|
|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00419234|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dewatripont, Mathias & Legros, Patrick, 2005.
"Public-private partnerships: contract design and risk transfer,"
5/2005, European Investment Bank, Economics Department.
- Mathias Dewatripont & Patrick Legros, 2005. "Public-private partnerships: contract design and risk transfer," ULB Institutional Repository 2013/175947, ULB -- Universite Libre de Bruxelles.
- Jason Furman & Joseph E. Stiglitz, 1998. "Economic Crises: Evidence and Insights from East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 1-136.
- JOhn Bennett & Elisabetta Iossa, 2005.
"Building and Managing Facilities for Public Services,"
The Centre for Market and Public Organisation
05/137, Department of Economics, University of Bristol, UK.
- Bennett, John & Iossa, Elisabetta, 2006. "Building and managing facilities for public services," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2143-2160, November.
- Bennett, John & Elisabetta Iossa, 2002. "Building and Managing Facilities for Public Services," Royal Economic Society Annual Conference 2002 22, Royal Economic Society.
- John Bennett & Elisabetta Iossa, 2002. "Building and Managing Facilities for Public Services," Economics and Finance Discussion Papers 02-08, Economics and Finance Section, School of Social Sciences, Brunel University.
- John Bennett & Elisabetta Iossa, 2004. "Building and Managing Facilities for Public Services," Public Policy Discussion Papers 02-08, Economics and Finance Section, School of Social Sciences, Brunel University.
- André de Palma & Jean-Luc Prigent, 2007. "Hedging global environment risks: An option based portfolio insurance," THEMA Working Papers 2007-09, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Kofman, Fred & Lawarree, Jacques, 1993.
"Collusion in Hierarchical Agency,"
Econometric Society, vol. 61(3), pages 629-656, May.
- Kofman, F. & Lawarree, J., 1990. "Collusion in Hierarchical Agency," Discussion Papers in Economics at the University of Washington 91-01, Department of Economics at the University of Washington.
- Kofman, F. & Lawarree, J., 1990. "Collusion in Hierarchical Agency," Working Papers 91-01, University of Washington, Department of Economics.
- Polackova, Hana, 1998. "Contingent government liabilities : a hidden risk for fiscal stability," Policy Research Working Paper Series 1989, The World Bank.
- Williamson, Oliver, 2009.
"The Theory of the Firm as Governance Structure: From Choice to Contract,"
Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 111-134, December.
- Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer.
- Estache, Antonio, 2005. "PPI partnerships versus PPI divorces in developing countries (or are we switching from PPPI to PPDI?)," Policy Research Working Paper Series 3470, The World Bank.
- Timothy Irwin, 2003. "Public Money for Private Infrastructure : Deciding When to Offer Guarantees, Output-based Subsidies, and Other Fiscal Support," World Bank Publications, The World Bank, number 15117.
- Martimort, David & Pouyet, Jerome, 2008.
"To build or not to build: Normative and positive theories of public-private partnerships,"
International Journal of Industrial Organization,
Elsevier, vol. 26(2), pages 393-411, March.
- David Martimort & Jérôme Pouyet, 2008. "To build or not to build: Normative and positive theories of public-private partnerships," Post-Print halshs-00754298, HAL.
- Eric Maskin & Jean Tirole, 2006.
"Public-private Partnerships and Government Spending Limits,"
Economics Working Papers
0075, Institute for Advanced Study, School of Social Science.
- Maskin, Eric & Tirole, Jean, 2008. "Public-private partnerships and government spending limits," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 412-420, March.
- Maskin, Eric & Tirole, Jean, 2006. "Public-Private Partnerships and Government Spending Limits," IDEI Working Papers 439, Institut d'Économie Industrielle (IDEI), Toulouse.
- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
- Valila, Timo, 2005. "How expensive are cost savings? On the economics of public-private partnerships," EIB Papers 4/2005, European Investment Bank, Economics Department.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00419234. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.