Public-Private Partnership

Definitions

At first, it has to be said that partnership is one of those catchall terms that may be used to convey all kinds of different meanings. On the one hand, some people consider any kind of relationship to be a partnership, and on the other hand, some genuine partnerships may be designated by other words. In France for instance, in addition to practitioners (in the financial sector in particular), the only academics to have used the expression PPP are economists and town planning specialists. French lawyers refer more willingly to “outsourcing administration of public services” (more restrictive than PPP), and political scientists refer to the “co-production of public policy or negotiation of contractual policies” (which has a broader meaning). However, the expression PPP is becoming more generalized as the phenomenon has grown.

According to dictionaries, partnership's most basic definition is any business or institutional association within which joint activity takes place. A PPP can be discerned from the moment such associations bring together one (or more) public organization(s) and one (or more) private organization(s) of whatever formal status, and they agree to act in concert. PPPs embrace public-sector partnership with both business and organizations in civil society, including community organizations, voluntary organizations, and nongovernmental organizations (NGOs).

The point is that one should not consider partnership as simply an equivalent to any contractual relation. Although such relationships are sometimes labeled partnerships by the parties concerned, when they are based simply on the traditional contracting principles of management, monitoring, and enforcement of a detailed specification contained within a legally binding agreement, they do not constitute genuine PPPs. The main reason for which not every contract between a public authority and a private-sector service provider constitutes a PPP is the following: Genuine partnership implies a triangular relationship binding the public authority, the private-sector partner, and the members of the public concerned with the service (users, customers, citizens). PPP is (or should be) a win-win agreement directed toward a social purpose.

But it is also true that (1) a multiplicity of agreements or contracts, more or less formal in nature and sometimes very informal, may give rise to a partnership; (2) the most institutionalized forms may go as far as the formalization of permanent structures mobilizing a coalition of interests and bringing them together around a common agenda between partners charged with taking policy decisions; and (3) in practice, PPPs produce a layering of practical solutions because it is in the nature of a partnership to develop and to adapt to the special circumstances of its particular field of operation. In this regard, political cultures and traditions have considerable impact. For instance, it is possible to distinguish between substitutive and collaborative forms of partnership. Under substitutive partnership, the private partner replaces the public agency more or less completely, as has happened in the French system of outsourcing public services. However, under collaborative partnership, typical of German organizations, each partner has its specific function that corresponds to a specific profession.

...