Introduction to the Special Issue on Public‐Private Partnerships

• Published date: 01 February 2015
• Author: FLAVIO MENEZES,DAVID MARTIMORT
• Date: 01 February 2015
• DOI: http://doi.org/10.1111/jpet.12133

INTRODUCTION TO THE SPECIAL ISSUE ON

PUBLIC-PRIVATE PARTNERSHIPS

DAVID MARTIMORT

Paris School of Economics

FLAVIO MENEZES

The University of Queensland

This special issue of JPET publishes a selection of papers which were pre-

sented at a workshop hosted by the University of Queensland and the Asso-

ciation for Public Economic Theory. The workshop was jointly organized by

the authors of this introduction at the Tangallooma Island Resort, in Bris-

bane’s Moreton Bay, Australia. Professors David Martimort (Paris School of

Economics) and Eduardo Engel1(Yale) were the two keynote speakers.

Despite a number of well known failures, public-private partnerships

(PPPs) continue to attract the attention of policy makers worldwide as an

attractive model for the provision of infrastructure. The PPP model differs

substantially from the traditional public tender model for infrastructure con-

struction. In the traditional public tender model, the government finances

the construction phase of the infrastructure, tendering the construction to

private parties. The operation and maintenance of the infrastructure also

may be contracted to private parties. In the PPP model, a government ten-

ders a “bundle” consisting of financing, construction, and operation of the

infrastructure (e.g., a road) to private parties. The contract is usually for

a fixed period. At the end of the contract, the asset reverts back to the

government.

PPPs raise a number of economic issues, which not only include the ques-

tion of when PPPs are preferred to other mechanisms such as traditional

procurement but also relate to its various dimensions such as the efficiency

of the tender, the contracting environment, the impact of renegotiation, and

funding and financing options (e.g., tolls versus availability payments or pub-

lic versus private financing). Some of these important themes were addressed

in the workshop and explored by the five papers published in this special

issue.

1Professor Engel presented an overview of his new book: Eduardo Engel, Ronald D. Fis-

cher, and Alexander Galetovic, The Economics of Public-Private Partnerships: A Basic Guide

(Cambridge University Press, 2014).

C2014 Wiley Periodicals, Inc.

Journal of Public Economic Theory, 17 (1), 2015, pp. 1–3.

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