Public–Private Partnerships, Commitment and X-Inefficiency

Article Type

Research Article

Publication Title

Arthaniti: Journal of Economic Theory and Practice

Abstract

We examine the formation of public–private partnerships (PPPs), one of the most important organisational forms to evolve over the last few decades. Given the volume of infrastructural investment required, PPPs seem essential for India's development. We unearth a role for PPP formation that is new in the literature, namely its role as a commitment device. In particular, we argue that the presence of the private firm allows a PPP to credibly commit to discontinuing the project when efficiency considerations demand so. JEL: D02, D04,D72, D73, D43.

First Page

157

Last Page

167

DOI

10.1177/0976747918795226

Publication Date

12-1-2018

Comments

All Open Access, Green

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