Political opportunism and transaction costs in contractual choice of public–private partnerships

Xiong, Wei; Zhong, Ninghua; Wang, Feng; Zhang, Muyang; Chen, Bin

doi:10.1111/padm.12760

Cited by 24 publications

(17 citation statements)

References 65 publications

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“…Wang et al, 2020). Local officials also seek to increase the number of PPP projects (especially projects of nonconcessions that rely on local government payments), which exceeds local fiscal capacity and results in increasing debt risks (Xiong et al, 2022).…”

Section: Analytic Frameworkmentioning

confidence: 99%

“…Local officials pursue political achievements, such as large PPP projects, to create highly visible performance even in illegal ways that increase local government debt (F. Wang et al, 2020). Local officials also seek to increase the number of PPP projects (especially projects of nonconcessions that rely on local government payments), which exceeds local fiscal capacity and results in increasing debt risks (Xiong et al, 2022).…”

Section: Analytic Frameworkmentioning

confidence: 99%

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The Distortion of Public–Private Partnerships in China: An Institutional Perspective of Central–Local Government Relations

Mao

2023

Administration & Society

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How to explain the distortion of public–private partnerships (PPPs) is underexplored. Drawing on the principal–agent theory, this article proposes an institutional incentive-driven framework. Based on a case study of PPPs in China, this article finds that central–local government relationships play a crucial role in shaping PPP performance. Goal incongruence and information asymmetry lead to two types of distortion. First, PPPs become a political task for local governments to higher-level governments’ needs. Second, PPPs serve as financing tools to create political achievements. These opportunistic behaviors violate the goals of the central government’s PPP policy and increase government debt risks.

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Section: Analytic Frameworkmentioning

confidence: 99%

Section: Analytic Frameworkmentioning

confidence: 99%

The Distortion of Public–Private Partnerships in China: An Institutional Perspective of Central–Local Government Relations

Mao

2023

Administration & Society

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“…Nevertheless, there are reasons to be skeptical about whether the public sector's ceding control rights are conducive to the project's overall goals. Highly specific investments may cause the hold‐up problem that is manifested as extortion by private parties against the public sector to obtain excess profits (Wang et al, 2018; Xiong et al, 2021).…”

Section: Exploratory Propositions On the Relationships Of Private Con...mentioning

confidence: 99%

Contextual recipes for adopting private control and trust in public–private partnership governance

Song

Liu

Sun

et al. 2022

Public Administration

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In governing public–private partnerships (PPPs), transferring control rights to the private sectors and building trust among partners are recognized as solutions to improve efficiency and adaptability. However, what contexts would fit into the adoption of these solutions remains unclear. Building on the relevant literature on project attributes and project environments, this article divides the context into several crucial factors: asset specificity, project publicness, institutional completeness, market maturity, and regulatory quality. A fuzzy set qualitative comparative analysis (fsQCA) was conducted on 1378 PPP projects in developing countries to examine the contexts that support the outcomes of private control and trust. Six causal paths created by a mix of contextual conditions are found to be sufficient for the outcomes, to which certain factors make unique contributions. Knowledge of these paths and context configurations can help to match the context to the considered governance solutions, thereby contributing to successful PPP governance.

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“…Besides, fiscal policy (e.g. accounting treatments of PPPs) cannot restrict this phenomenon as government's payment obligation is kept off the balance sheet and lacks transparency (Xiong et al, 2021). Thus, PPPs may incur governments' hidden liabilities and impede the sustainability of urban public finance, which goes against the principle of intergenerational equity of social sustainability (Yuan et al, 2020) F26 F23 F24 F25 F19-F5 F1 Inadequate private sectors participation (B4)…”

Section: Public-private Partnershipsmentioning

confidence: 99%

Public–private partnerships: a collaborative framework for ensuring project sustainable operations

Liu

Wang

et al. 2022

ECAM

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PurposeThis study aims to develop a collaborative governance framework (CGF) to systematically investigate the impeding factors (IFs) in terms of the operational sustainability of PPPs. It examines the transmission pattern (i.e. the way in which network members react to each other) of the IFs network.Design/methodology/approachLiterature review and interview were adopted to identify the IFs. Then, with the data collected from the interview in China, the social network analysis and interpretive structure model were synergised to examine the chain reaction, driving and dependent powers, and hierarchical structure of the identified IFs.FindingsThe results reveal that the cognition, institutional, financial and participation aspects are key barriers confronted by PPP sustainability, and the government plays a leading role in controlling factors causing sustainability-related problems in PPPs. Weak government leadership and institutional environment were identified as the most fundamental reasons triggering a chain of IFs, while project governance and management activities act as bridge nodes that play an intermediary role in the IFs network.Research limitations/implicationsThis research contributes to the literature on PPP governance by (1) bridging the literature gap through the development of CGF for explaining the governance of PPP sustainability with a holistic view that considers both macro environment and operational project processes; and (2) identifying the transmission pattern of IFs network which uncovers the underlying dynamics causing the unsustainable operation of PPPs.Practical implicationsThis research provides practitioners with a list of key checkpoints for preventing failure escalation, enables decision-makers to prioritise obstacle-mitigation efforts and develop a feasible process to control PPP operation, and offers management countermeasures to remove the key barriers impeding PPP sustainability.Originality/valueThis study is novel for adopting network-oriented techniques to quantify the relative importance of the IFs and examine the transmission pattern of the IFs system. Therefore, it visualises the complex underlying dynamics causing unsustainable PPP operation, identifies root and direct causes of PPP failures, and provides decision-makers with insights into sustaining PPP sustainability from a network-oriented perspective.

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Political opportunism and transaction costs in contractual choice of public–private partnerships

Cited by 24 publications

References 65 publications

The Distortion of Public–Private Partnerships in China: An Institutional Perspective of Central–Local Government Relations

The Distortion of Public–Private Partnerships in China: An Institutional Perspective of Central–Local Government Relations

Contextual recipes for adopting private control and trust in public–private partnership governance

Public–private partnerships: a collaborative framework for ensuring project sustainable operations

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