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Is the PPP model applicable across sectors?

  • Riess, Armin


    (European Investment Bank, Economic and Financial Studies)

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    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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    Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 6/2005.

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    Length: 21 pages
    Date of creation: 06 Jun 2005
    Date of revision:
    Handle: RePEc:ris:eibpap:2005_006
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    1. 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.
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