Public budget norms and PPP

An anomaly

Authored by: Piet De Vries

The Routledge Companion to Public–Private Partnerships

Print publication date:  February  2013
Online publication date:  March  2013

Print ISBN: 9780415781992
eBook ISBN: 9780203079942
Adobe ISBN: 9781136163302


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Politicians have a good prima facie case for PPP. First, private involvement in public provision may bring in a drive for efficiency the public sector is not famous for; PPPs may produce value-for-money. Second, PPP entailing private finance may relieve public-budget stress. Obviously, the potential efficiency merit of PPPs is a conditional promise, requiring well-deliberated choices, e.g. concerning contractual design. It is in particular the private-finance opportunity of PPPs that immediately may reward politicians. In an investment-and-service-PPP project, private finance may replace public-budget investments. The very first candidates for PPPs are infrastructure projects requiring huge capital expenditures. PPP infrastructure projects enable politicians cutting the public budget to save substantial amounts of money, while simultaneously holding on to provisions the public sector is considered to be responsible for. Together with the potential value-for-money, PPPs seem to bring together the best of two worlds.

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