The Governance of Public–Private Partnerships: Complexity, Uncertainty and Incompleteness

The objective of this thesis is to analyse ex-post governance issues in public-private partnerships (PPPs). In particular, it utilises models developed by Grossman and Hart (1986) and Hart and Moore (1999) to examine the impact of property-rights ownership on ex-post risk governance issues. The study focuses on four main areas. The first is an exploratory analysis of the empirical determinants that increase PPPs' complexity, incompleteness, and uncertainty. The second investigates the relationship between the government and private sector stakeholders. The third focuses on the current governance framework. The fourth examines the intergenerational equity issues caused by PPPs.

The thesis adopts a case study approach based on qualitative methods, taking the fate of a major failure, Carillion, for illustration. It involves documentary analysis of secondary data and interviews conducted by the House of Commons Select Committee with the main stakeholders in the case study.

The primary contribution of this thesis is to provide a deep understanding of the shortfalls in the current governance framework and the reforms needed to mitigate the risks of PPPs. The thesis also contributes by investigating a bureaucratic partner, the government sector, and identifying the core issues in this partner. The thesis also investigates the impact of public policy on intergenerational equity issues.

This thesis found that the structure of PPPs increases their complexity. The UK’s government lacks an effective risk management system to manage the PPPs’ sector, which creates a conflict of interest between the PPPs’ regulators. The current governance framework is outdated and not compatible with complex projects like PPPs. A similar finding is reported by Osborne (2010). Public policy in relation to the applied social discount rate (SDR) is efficiency-based rather than ethics-based.