Public-private partnerships: a multidimensional model for contracting

International Journal of Public Policy

Volumn 1, Issue 1-2, 2005, Pages 22-40

  Zarco Jasso, Hugo ^a  

^a IESE BUSINESS SCHOOL   (Spain)

Author keywords

contractual choices; hybrid organisations; Public private partnerships; qualitative comparative analysis

Indexed keywords

EID: 62249135511     PISSN: 17400600     EISSN: 17400619     Source Type: Journal    
DOI: 10.1504/ijpp.2005.007791     Document Type: Article

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78. Broadly speaking, the focus of the new public management movement is on creating an institutional and organisational context that – in as many respects as possible – tries to mirror private sector’s organisational modes of organising and managing. The core of NPM ideology-which was influential in the development of public sector reform programmes in the 1980s and 1990s-is that public sector provision was often inefficient; that it led neither to cost reduction nor quality improvement; and that – if unchecked – it would generate growth in tax bills, an increasingly dissatisfied electorate and a decline in the quality of service provision. Thus, based on these beliefs NPM sets costs attainment, public support, and performance improvements as the central drivers for reform.
79. Dunleavy and Hood (1994) presented four alternative new public management models derived from a two-by-two matrix. One axis measures the density of rules in the system, and the second the degree of distinction between public and private sectors related to personnel, structures and business methods. They suggested that there are not one but several movements within NPM which will lead the future. Indeed, by looking outside the UK there are alternative models and developed thinking on NPM – even in countries that have a strong tradition of large state-controlled public sector. Diversification has taken place as NPM is adopted in political, cultural and organisational contexts. For instance, NPM might be characterised by reinventing government or entrepreneurship in the US, decentralisation and regulation in European Nordic countries; contracting in New Zealand; and cost and control measures in the UK.
80. In the 1970s some authors suggested that public and private organisations can be distinguished according to the presence or absence of market structures, externalities and ownership transferability (Buchanan and Tullock, 1962; Niskanen, 1971; Alchian and Demsetz, 1972; Clarkson, 1972). More generally, these authors support the idea that a fundamental basis for distinguishing public and private sectors is concern with organisational aims and typical functions as executed by each organisation (e.g. the public sector focus would stress elements such as equity, fairness, and the rule of law in handling public provisions whereas the private sector would focus on cost-benefit analysis, effectiveness, and efficiency in performing its business). However, this assumption has been challenged by a more sceptical view of several contemporary scholars. In particular, Murray (1975) and Lan and Rainey (1992) assert that the notion that profits are the sole or main reason for the existence of private business – and that profits are never the objective of public sector activities – is itself misleading.
81. Clear evidence of this is seen in several projects that have currently been undertaken by the private sector in the United Kingdom under the new investment scheme denominated ‘the Private Finance Initiative (PFI)’ (United Kingdom, HM Treasury, 1995).
82. Although Bozeman’s arguments are based on the idea that ‘all organisations are public’ these also imply that equally valid conclusions can be obtained if they are employed to determine the extent to which any single organisation is private.
83. QCA is a DOS programme distributed by the Publications Office, Institute for Policy Research, Northwestern University, Evanston, IL 60208 USA.