Public-Private Partnerships: Theoretical Basis and Economic Analysis

The Public-Private Partnership (PPP) is globally recognized as a common style of management, especially in the sectors of trans-portation, public services and community facilities. The interests of this partnership approach reside in the off-budget financing for the public partner, in the private partners’ high rate of return, in the reduced completion deadlines of the projects, and finally in the availability and quality of the public service provided. The economic theory sees in PPPs many advantages and disadvantages related not only to the partnership, but also to the nature of the public-private relationship that is considered as a particular relation-ship. In this article, we analyze in the first part the main theoretical foundations in which the Public Private Partnership (PPP) is inserted, then, we present the assumptions and the principles of each theory. In the second part, we present an economic analysis of this partnership approach while going through its advantages, disadvantages, and potential paths to address its limitations.
Keywords: Public-Private Partnership, Theoretical foundations of PPP, Economic analysis of PPP.