Rethinking Public-private Partnerships: An Unbundling Approach

TLDR: In this paper, the authors argue that risk and uncertainty loom large in public-private partnership (PPP) and there is a need to consciously move away from long term, rigid, monolithic, and complex contracts and adopt short term, flexible, modular and simple arrangements that allow for effective management.

Abstract: Despite numerous failure stories the interest in Public-private Partnerships (PPPs) is growing the world over, giving rise to a “PPP Paradox”. Taking a definitional perspective and leveraging learnings from the management literature on strategic alliances, the need for a fundamental rethink of the PPP world view is emphasized to explain this paradox. It is argued that in PPPs, where risk and uncertainty loom large, there is a need to consciously move away from long term, rigid, monolithic, and complex contracts and adopt short term, flexible, modular and simple arrangements that allow for effective management. We view this as an unbundling approach. The PPI World Bank database and experiences from the Indian highway sector are leveraged to contextualize the arguments made.