Public Private Partnerships: Accountability and Governance
Baniotopoulou (2001) notes that during the last quarter of the 20th century many economies suffered a severe crisis due to a decline in their industries. Largely attributed to high competitiveness in the international market, he asserts, this phenomenon brought about a massive economic and social change. The urgent need of the affected economies to find alternative financial sources in order to survive and cope with the rising social problems resulted in a tendency towards the tertiary sector. Services in a rapidly and perpetually changing world, facing the challenge of globalization, have now come to be of unquestionable value, which the post industrial economies seem to have set to reinforce and sustain to their own benefit. This tendency coincided with another and earlier political development that sought to reduce the role of government as a provider or generator of public services. This development is now widely associated with the Administrations of President Reagan (1981 1989) in the USA and Prime Minister Thatcher (1979 1990) in the UK. Reagan and Thatcher advocated privatization, contracting out and devolution to reduce the responsibility and involvement of central government agencies in the production and provision of services and public goods. Such an approach, they claimed, would unleash market forces which would bring about competition and greater efficiencies that are inherently absent in the public sector (Andrisani, Hakim and Savas, 2002) However, in many areas this strategy was not much of a help nor was it a viable option to replace government providers with commercial, for profit organizations. Thus, the temptation to experiment with a hybrid organization is not surprising. Under these circumstances it was easy to understand the motivation and interest to "invent" an organization that retains the virtues of a public agency when it comes to issues of accountability and public service while retaining competitiveness and prudent risk management like a private entity. Such characteristics were also consistent with the teachings of New Public Management of the time (Andrisani, Hakim and Savas, 2002) and Reinventing Government (Osborne and Gaebler, 1992) These new hybrid organizations' public private partnerships (PPP) have been characterized by Bovaird (2004:199) as "working arrangements based on a mutual commitment (over and above that implied in any contract) between a public sector organization with any organization outside of the public sector." However, the majority of reports on the experimenting with the new mode of service delivery took place in connection with projects that involved the development and management of "tangible" public goods and services like infrastructure and construction. In such areas calculation of return on investment (ROI) profit, risk and economic advantages of public private partnerships lend themselves more easily for academic analysis. In comparison, the professional literature did not pay too much attention to the analysis of projects that involve "soft" services in areas where private initiatives are not common. Such services include PPP projects that address certain spheres of health, education, culture or welfare. It is an irony that the literature offers little insight and even less in a way of theory or models to guide the development of future projects in these areas. Such writings that derive lessons from experiences can be useful because in many cases economic and quantitative tools, such as return on investment (ROI) or benefit cost analysis (BCA) are not readily available to planner or managers of such projects. Mobilizing and exploiting the lessons that have been derived from past experiences is one way of trying to help fill this gap and the main rationale for compiling this symposium. To be sure, what we are trying to do with this scholarly symposium is to explore the possible attributes and the possible reasons of success and failure of public private partnerships (PPP) in labor intensive areas of public service.