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Optimal Provision of Infrastructure Using Public-Private Partnership Contracts

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Listed:
  • van der Laan, G.
  • Ruys, P.H.M.

    (Tilburg University, School of Economics and Management)

  • Talman, A.J.J.

    (Tilburg University, School of Economics and Management)

Abstract

This paper deals with the optimal provision of infrastructure by means of public-private partnership contracts. Inthe economic literature infrastructure is characterized as a large, indivisible and non-rival capital good thatproduces services for its users. The non-rivalness or nonexcludability of the infrastructure and the large costs ofinfrastructure causes it to be a public good. On the other hand, infrastructure possesses characteristics of a privatecommodity because it facilitates of the use of a complementary private commodity. Modern monitoring techniquesopen new possibilities to reveal the need of individual users for infrastructure. Consequently, a large part of thepublic financing of infrastructure can be privatised. In this paper we discuss the design of an operational system tofinance the costs of infrastructure. It will be shown that the system basically can result in an economically efficientlevel of infrastructure. The basic idea is that use of infrastructure is constrained by the availability of theinfrastructure being provided. Therefore users who are hampered by too small a provision of the infrastructure arewilling to pay for the use of infrastructure.
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(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • van der Laan, G. & Ruys, P.H.M. & Talman, A.J.J., 2000. "Optimal Provision of Infrastructure Using Public-Private Partnership Contracts," Other publications TiSEM 608311e8-a7e7-4810-a3d5-3, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:608311e8-a7e7-4810-a3d5-35bccf61bb0f
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    References listed on IDEAS

    as
    1. Ruys, P.H.M. & van der Laan, G., 1987. "Computation of an industrial equilibrium," Research Memorandum FEW 257, Tilburg University, School of Economics and Management.
    2. Diamantaras, Dimitrios & Gilles, Robert P, 1996. "The Pure Theory of Public Goods: Efficiency, Dencentralization, and the Core," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 851-860, November.
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    4. Ebert, Udo, 1997. "Selecting Preferences for Nonmarket Goods: Possibilities and Limitations," Public Finance = Finances publiques, , vol. 52(3-4), pages 301-317.
    5. Cornet, Bernard, 1988. "General equilibrium theory and increasing returns : Presentation," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 103-118, April.
    6. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    7. Cornielje, O. J. C. & Van Der Laan, G., 1986. "The computation of quantity-constrained equilibria by virtual taxes," Economics Letters, Elsevier, vol. 22(1), pages 1-6.
    8. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    9. Brown, Donald J. & Heller, Walter P. & Starr, Ross M., 1992. "Two-part marginal cost pricing equilibria: Existence and efficiency," Journal of Economic Theory, Elsevier, vol. 57(1), pages 52-72.
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    Cited by:

    1. Heba Samir & Aya Maher, 2018. "Public Private Partnership: Insights from the Egyptian Experience," International Journal of Human Resource Studies, Macrothink Institute, vol. 8(3), pages 241253-2412, December.

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