This section concerns the findings relating to the first research question: What does PPP mean? (see also article 1; and article 2). This part of the study makes three contributions to the field. First, an overview of the PPP literature is offered by ordering the literature into four major streams of research (i.e. four PPP approaches) (article 1). Second, and based on the empirical findings of the case study, a provisional two-dimensional understanding of PPP that distinguishes between PPP structures and PPP processes is proposed (article 2; Section 6.1). Third, and complementary to the two previous contributions, a categorization of three prototypes of PPP is developed (Section 4.2).
A central finding from this part of the analysis is that PPP is a nebulous concept with little analytical leverage. Based on the findings, it is argued that the most expedient way forward, when it comes to curbing the conceptual bewilderment, is to explicitly acknowledge that there are different compartments of research adhering to different understandings of PPP. Then within each compartment, knowledge and lessons about best practice can be accumulated (article 1). This solution is, as noted earlier, a middle ground between on the one hand operating with a very open-ended version of the term (for instance, Rosenau 2000;
Mörth and Sahlin-Andersson 2006), and on the other hand reducing PPP to encompass only a subset of the many public-private mixes that are effectively labelled PPP today (for this approach, see for instance, Klijn and Teisman 2000).29 As noted earlier, there are several advantages by doing so. Mapping the PPP field reduces conceptual bewilderment, makes the literature more accessible to newcomers, and moreover moves us beyond conceptual quarrels and directs our attention instead towards substantive issues such as how PPP functions in practice, and the worth and merits of different PPP models.
The timing of this study was fortunate in the sense that it provided a unique opportunity for contributing to a young scholarly field in rapid development.
Future research can build on the classification of the literature and the definitions of PPP offered here and in that sense move quickly beyond the primal task of definition.
4.1 Organizing the literature – the four PPP approaches
As argued in article 1 and article 2, there are at least four different clusters of research (PPP approaches) within the PPP literature. These are: the infrastructure approach30, the local regeneration approach, the policy approach, and the development approach
29 I do however sympathize with this latter approach because it directs our attention to the fact that many of the public-private mixes today labeled partnerships do not diverge significantly from already known transactional contractual relationships. It is important that researchers, policy makers as well as other practicians are aware of this fact; i.e. that the PPP label is often used as a misnomer for strict principal-agent arrangements and traditional buyer-seller relationships.
30 Note that the term ‘infrastructure’ is not limited to transport infrastructure but refers to economic, social as well as hard and soft infrastructure (Grimsey and Lewis 2004).
specifically what is analyzed here are the characteristics of the partnership relationship between the involved actors.
3.3.3 The relational dimension
Finally, the focus of this analysis is the relational dimension of cooperation. This means that this analysis is intended to produce knowledge about non-structural aspects of cooperation. Thus addressed in this study is for instance the level of trust between the involved actors, the relational quality in the dyadic relationship, interaction patterns and roles, and the norms and values that guide and characterize cooperation in the individual cases. This part of the analysis has, as already noted, been informed by research on private-private partnerships (strategic alliances). A key argument is here, that this literature is particular relevant to consult when we want to know more about the importance of non-formal aspects of cooperation (Section 5; article 4).
To recapitulate, the present analysis of PPP practice draws on open-ended face-to-face interviews and follow-up telephone interviews involving close-end questions. It is a multiple-case design and the analytical level of the study is embedded at the micro-level with the dyadic relationship as the unit of analysis. The key focus of analysis is cooperation at the public-private interface in each investigated PPP project – in particular the relational dimension of cooperation. The methodological approach is of an exploratory, inductive and descriptive nature.
However, there are elements of deduction in that the analysis has been guided by the extant theoretical discourse about PPP as well as analytical parameters derived from the alliance literature.
4 COMING TO TERMS WITH PPP
This section concerns the findings relating to the first research question: What does PPP mean? (see also article 1; and article 2). This part of the study makes three contributions to the field. First, an overview of the PPP literature is offered by ordering the literature into four major streams of research (i.e. four PPP approaches) (article 1). Second, and based on the empirical findings of the case study, a provisional two-dimensional understanding of PPP that distinguishes between PPP structures and PPP processes is proposed (article 2; Section 6.1). Third, and complementary to the two previous contributions, a categorization of three prototypes of PPP is developed (Section 4.2).
A central finding from this part of the analysis is that PPP is a nebulous concept with little analytical leverage. Based on the findings, it is argued that the most expedient way forward, when it comes to curbing the conceptual bewilderment, is to explicitly acknowledge that there are different compartments of research adhering to different understandings of PPP. Then within each compartment, knowledge and lessons about best practice can be accumulated (article 1). This solution is, as noted earlier, a middle ground between on the one hand operating with a very open-ended version of the term (for instance, Rosenau 2000;
Mörth and Sahlin-Andersson 2006), and on the other hand reducing PPP to encompass only a subset of the many public-private mixes that are effectively labelled PPP today (for this approach, see for instance, Klijn and Teisman 2000).29 As noted earlier, there are several advantages by doing so. Mapping the PPP field reduces conceptual bewilderment, makes the literature more accessible to newcomers, and moreover moves us beyond conceptual quarrels and directs our attention instead towards substantive issues such as how PPP functions in practice, and the worth and merits of different PPP models.
The timing of this study was fortunate in the sense that it provided a unique opportunity for contributing to a young scholarly field in rapid development.
Future research can build on the classification of the literature and the definitions of PPP offered here and in that sense move quickly beyond the primal task of definition.
4.1 Organizing the literature – the four PPP approaches
As argued in article 1 and article 2, there are at least four different clusters of research (PPP approaches) within the PPP literature. These are: the infrastructure approach30, the local regeneration approach, the policy approach, and the development approach
29 I do however sympathize with this latter approach because it directs our attention to the fact that many of the public-private mixes today labeled partnerships do not diverge significantly from already known transactional contractual relationships. It is important that researchers, policy makers as well as other practicians are aware of this fact; i.e. that the PPP label is often used as a misnomer for strict principal-agent arrangements and traditional buyer-seller relationships.
30 Note that the term ‘infrastructure’ is not limited to transport infrastructure but refers to economic, social as well as hard and soft infrastructure (Grimsey and Lewis 2004).
(see also Weihe, 2005). Each approach is embedded in a distinct context, involves different types of actors as well as distinct structures. Characteristically, there is little cross-communication between the different schools and scholars working within one perspective seldom explicitly recognize the existence of the other PPP approaches (van der Wel 2004, 21). Therefore, the PPP literature is somewhat fragmented with small islands of research that are not connected with one another (as illustrated in Figure 3 below). For the same reason, when surveying the literature at a glance, quite inconsistent and conflicting statements about PPP can be identified. This can give rise to quite some confusion (article 1).
Figure 3 Overview of PPP approaches (clusters of PPP research)
The infrastructure approach
The policy approach
The local regeneration approach
The development approach The PPP
literature
Let me briefly recapitulate the key features of each approach. In the infrastructure approach the focus is on various types of infrastructure projects; or more precisely the delivery of infrastructure assets and associated services over a long term period (typically 25-30 years). This is, as argued earlier, currently the most dominant meaning of the PPP term. Within the infrastructure approach there is a broad and narrow understanding of the infrastructure PPP. The broad version includes more or less all types of infrastructure projects that involve some extent of private delivery. In the narrow understanding of the term, a project must include private finance, construction, design, operation and maintenance in order to qualify as an infrastructure PPP. It is the latter type of infrastructure PPP which is investigated in the context of this study. In the local regeneration approach, attention is directed towards local economical development and renewal. This approach to PPP originates from the urban policy literature and concerns different types of arrangements where local businesses and local governments join their forces in order to relieve the economic and social distress of their cities. A local regeneration PPP is characterized by principal-principal relations between public and private local actors which involve some sort of joint production, sharing of risk, and a durable character of cooperation. Local regeneration PPP does not include cases of buyer-supplier
relationships where the government identifies and defines the service to be delivered by the private provider. Rather, in the cases of local regeneration partnerships there is more of a genuine effort to achieve a joint goal: i.e. regeneration of the local area.
Moreover, this type of partnership is often initiated by the business sector in a local community with a genuine interest in remedying the economical distress of that city.
The policy approach on the other hand concerns non-project based and non time-delimited public-private relations. It concerns the institutional set-up between public and private actors in different policy areas. In this approach, attention is directed towards how a specific policy area is organized and what characterizes the public-private division of work within that particular area. Finally, in the development approach, there is a change of context and different actors are involved in the PPP. The focus within this approach is third world development, and, in addition to public and private actors, there are a number of governmental and non-governmental international aid-organizations acting as third-party facilitators/catalysts for cooperation. Thus this approach departs somewhat from the others in the sense that international organizations and other donor organizations play an important role in the advancement of PPP with the overall aim of achieving development goals.
The four approaches are not claimed to be exhaustive nor absolute.
Over time, approaches might be added and existing approaches can be refined. For example, one could argue for a fifth PPP approach called the governance approach (Weihe 2005) which captures the part of the PPP literature which is closely related to network research and the governance paradigm within public management research (for instance, Koppenjan and Klijn 2004; Rhodes 1997; Kooiman 1993; Kooiman 2003). This perspective on PPP cuts across the four approaches proposed here. The key thing to emphasise here is that it is important to explicitly acknowledge that there are different compartments in the PPP literature because, as noted above, this allows us to accumulate approach specific lessons and moreover, provides us with a terminology that enables policy makers and other stakeholders to develop policies on a sounder basis.
4.2 Three PPP prototypes - a supplementary way of categorizing As a supplement to organizing the literature into four PPP approaches, we can distinguish between three prototypes of structures: a) the contractual PPP, b) the organizational PPP, and c) the network PPP (see Table 2). The three prototypes are mutually exclusive in the sense that a contractual PPP cannot be a network PPP at the same time and vice versa. The structures are intrinsically different. However, within each category, there can be variations. The contractual PPP, for instance, can
(see also Weihe, 2005). Each approach is embedded in a distinct context, involves different types of actors as well as distinct structures. Characteristically, there is little cross-communication between the different schools and scholars working within one perspective seldom explicitly recognize the existence of the other PPP approaches (van der Wel 2004, 21). Therefore, the PPP literature is somewhat fragmented with small islands of research that are not connected with one another (as illustrated in Figure 3 below). For the same reason, when surveying the literature at a glance, quite inconsistent and conflicting statements about PPP can be identified. This can give rise to quite some confusion (article 1).
Figure 3 Overview of PPP approaches (clusters of PPP research)
The infrastructure approach
The policy approach
The local regeneration approach
The development approach The PPP
literature
Let me briefly recapitulate the key features of each approach. In the infrastructure approach the focus is on various types of infrastructure projects; or more precisely the delivery of infrastructure assets and associated services over a long term period (typically 25-30 years). This is, as argued earlier, currently the most dominant meaning of the PPP term. Within the infrastructure approach there is a broad and narrow understanding of the infrastructure PPP. The broad version includes more or less all types of infrastructure projects that involve some extent of private delivery. In the narrow understanding of the term, a project must include private finance, construction, design, operation and maintenance in order to qualify as an infrastructure PPP. It is the latter type of infrastructure PPP which is investigated in the context of this study. In the local regeneration approach, attention is directed towards local economical development and renewal. This approach to PPP originates from the urban policy literature and concerns different types of arrangements where local businesses and local governments join their forces in order to relieve the economic and social distress of their cities. A local regeneration PPP is characterized by principal-principal relations between public and private local actors which involve some sort of joint production, sharing of risk, and a durable character of cooperation. Local regeneration PPP does not include cases of buyer-supplier
relationships where the government identifies and defines the service to be delivered by the private provider. Rather, in the cases of local regeneration partnerships there is more of a genuine effort to achieve a joint goal: i.e. regeneration of the local area.
Moreover, this type of partnership is often initiated by the business sector in a local community with a genuine interest in remedying the economical distress of that city.
The policy approach on the other hand concerns non-project based and non time-delimited public-private relations. It concerns the institutional set-up between public and private actors in different policy areas. In this approach, attention is directed towards how a specific policy area is organized and what characterizes the public-private division of work within that particular area. Finally, in the development approach, there is a change of context and different actors are involved in the PPP. The focus within this approach is third world development, and, in addition to public and private actors, there are a number of governmental and non-governmental international aid-organizations acting as third-party facilitators/catalysts for cooperation. Thus this approach departs somewhat from the others in the sense that international organizations and other donor organizations play an important role in the advancement of PPP with the overall aim of achieving development goals.
The four approaches are not claimed to be exhaustive nor absolute.
Over time, approaches might be added and existing approaches can be refined. For example, one could argue for a fifth PPP approach called the governance approach (Weihe 2005) which captures the part of the PPP literature which is closely related to network research and the governance paradigm within public management research (for instance, Koppenjan and Klijn 2004; Rhodes 1997; Kooiman 1993; Kooiman 2003). This perspective on PPP cuts across the four approaches proposed here. The key thing to emphasise here is that it is important to explicitly acknowledge that there are different compartments in the PPP literature because, as noted above, this allows us to accumulate approach specific lessons and moreover, provides us with a terminology that enables policy makers and other stakeholders to develop policies on a sounder basis.
4.2 Three PPP prototypes - a supplementary way of categorizing As a supplement to organizing the literature into four PPP approaches, we can distinguish between three prototypes of structures: a) the contractual PPP, b) the organizational PPP, and c) the network PPP (see Table 2). The three prototypes are mutually exclusive in the sense that a contractual PPP cannot be a network PPP at the same time and vice versa. The structures are intrinsically different. However, within each category, there can be variations. The contractual PPP, for instance, can
vary in length and content. Thus some contractual PPPs concern services only, while others (including the type of PPP analysed here) involve infrastructure elements in addition to associated services. Further some contractual PPPs may be relatively short term contracts, while others are long term. A key problem with much of the PPP literature is that we often do not know precisely what types of formal structures are addressed. This is in particular a difficulty in relation to what I have previously coined the governance approach to PPP because (due to the adoption of broad definitions of the term) it is not clear what types of public-private arrangements are included in the analyses (for instance, Edelenbos, Klijn and Steijn 2007, 64).
Conceptual clarity can be enhanced by delineating not only the strand of research but also the particular formal structures that are investigated.
Table 2 Variety of PPP formal structures CONTRACTUAL PPP
ORGANIZATIONAL PPP
NETWORK PPP
Formal structure Contractual link between public and private actors
Joint organizational expression
Loosely coupled public-private relations (including networks and general policy relations) Definition A policy instrument for
the facilitation of contractual relations between public and private actors that involves commitments of private capital and labour over a sustained period of time and which ushers in new governance practices
Durable cooperation between public and private actors which involves joint development of products, sharing of risks and which involves a joint organizational expression (adapted from Van Ham and Koppenjan 2001 &
Klijn and Teisman 2005)
Non-institutionalized network based policy relationships between private and public actors.
Typical examples Infrastructure PPPs Local regeneration PPPs Policy networks, policy partnerships Illustration
As also argued in article 5, a common distinction made in the theoretical discourse about PPP is PPP contracts (or concessions) and PPP as organizational cooperation
projects (Klijn and Teisman 2005). In the former different parts of infrastructure projects (design, construction, finance, operation and or maintenance) are integrated in a contract (Klijn and Teisman 2005, 98) while in the latter “different projects are integrated with each other in order to achieve surplus value”, and moreover the latter type of PPP is argued to involve more intensive interaction than the former type (Klijn and Teisman 2005, 98-100). Another author distinguishes between DBFM(O) projects (Design-Build-Finance-Maintain-Operate) and the alliance model (van der Wel 2004; for a similar distinction see Koppenjan 2005, 138). The alliance model refers to cases were cooperation has an organizational expression; i.e. a legal entity such as a joint venture (van der Wel 2004, 10) and the DBFM(O) model is similar to what Klijn and Teisman label PPP contracts. Correspondingly on a European Community level a distinction is made between the concession model and the joint venture model of PPP (Bergström 2006, 2; COM 2004). There thus appears to be increasing agreement about the existence of two main categories of PPP. First, that there is a group of PPPs that are exclusively made up of contractual links (different types of long-term contractual relations typically involving private finance, maintenance and/or operations). Secondly, that there is another group of PPPs which involves more integrated relationships between the involved public and private parties. Within this latter group there is a split between authors that explicitly assert that PPP involves some extent of joint organizational expression (e.g. COM 2004;
van der Wel 2004; Wettenhall 2006), and other authors that stress that this version of PPP involves more cooperation in the sense that the involved public and private actors jointly find new solutions. In this latter understanding of the term, PPP has been defined as “co-operation of some durability between public and private actors in which they jointly develop products and services and share risks, costs and resources which are connected with these products or services” (Van Ham and Koppenjan 2001, 598; for a similar definition see Klijn and Teisman 2005, 96; and Klijn and Teisman 2000, 85). This definition does not limit the PPP term to joint organizational entities but broadens it to include a variety of different types of links between public and private actors. The structural form is not determined a priori (supposedly it can be a contract, a new organizational entity as well as a network).
This lack of specification of what kind of structural arrangements cooperation involves can be argued to contribute to the conceptual ambiguity concerning PPP.
In the first two PPP prototypes proposed here (contracts and organizational PPPs) cooperation involves some degree of institutionalization; i.e.
cooperation is formalized. This is however not the case in relation to the third category – the network PPP. Here the PPP term is used much more broadly and encompasses loosely organized network structures and policy relationships which are
vary in length and content. Thus some contractual PPPs concern services only, while others (including the type of PPP analysed here) involve infrastructure elements in addition to associated services. Further some contractual PPPs may be relatively short term contracts, while others are long term. A key problem with much of the PPP literature is that we often do not know precisely what types of formal structures are addressed. This is in particular a difficulty in relation to what I have previously coined the governance approach to PPP because (due to the adoption of broad definitions of the term) it is not clear what types of public-private arrangements are included in the analyses (for instance, Edelenbos, Klijn and Steijn 2007, 64).
Conceptual clarity can be enhanced by delineating not only the strand of research but also the particular formal structures that are investigated.
Table 2 Variety of PPP formal structures CONTRACTUAL PPP
ORGANIZATIONAL PPP
NETWORK PPP
Formal structure Contractual link between public and private actors
Joint organizational expression
Loosely coupled public-private relations (including networks and general policy relations) Definition A policy instrument for
the facilitation of contractual relations between public and private actors that involves commitments of private capital and labour over a sustained period of time and which ushers in new governance practices
Durable cooperation between public and private actors which involves joint development of products, sharing of risks and which involves a joint organizational expression (adapted from Van Ham and Koppenjan 2001 &
Klijn and Teisman 2005)
Non-institutionalized network based policy relationships between private and public actors.
Typical examples Infrastructure PPPs Local regeneration PPPs Policy networks, policy partnerships Illustration
As also argued in article 5, a common distinction made in the theoretical discourse about PPP is PPP contracts (or concessions) and PPP as organizational cooperation
projects (Klijn and Teisman 2005). In the former different parts of infrastructure projects (design, construction, finance, operation and or maintenance) are integrated in a contract (Klijn and Teisman 2005, 98) while in the latter “different projects are integrated with each other in order to achieve surplus value”, and moreover the latter type of PPP is argued to involve more intensive interaction than the former type (Klijn and Teisman 2005, 98-100). Another author distinguishes between DBFM(O) projects (Design-Build-Finance-Maintain-Operate) and the alliance model (van der Wel 2004; for a similar distinction see Koppenjan 2005, 138). The alliance model refers to cases were cooperation has an organizational expression; i.e. a legal entity such as a joint venture (van der Wel 2004, 10) and the DBFM(O) model is similar to what Klijn and Teisman label PPP contracts. Correspondingly on a European Community level a distinction is made between the concession model and the joint venture model of PPP (Bergström 2006, 2; COM 2004). There thus appears to be increasing agreement about the existence of two main categories of PPP. First, that there is a group of PPPs that are exclusively made up of contractual links (different types of long-term contractual relations typically involving private finance, maintenance and/or operations). Secondly, that there is another group of PPPs which involves more integrated relationships between the involved public and private parties. Within this latter group there is a split between authors that explicitly assert that PPP involves some extent of joint organizational expression (e.g. COM 2004;
van der Wel 2004; Wettenhall 2006), and other authors that stress that this version of PPP involves more cooperation in the sense that the involved public and private actors jointly find new solutions. In this latter understanding of the term, PPP has been defined as “co-operation of some durability between public and private actors in which they jointly develop products and services and share risks, costs and resources which are connected with these products or services” (Van Ham and Koppenjan 2001, 598; for a similar definition see Klijn and Teisman 2005, 96; and Klijn and Teisman 2000, 85). This definition does not limit the PPP term to joint organizational entities but broadens it to include a variety of different types of links between public and private actors. The structural form is not determined a priori (supposedly it can be a contract, a new organizational entity as well as a network).
This lack of specification of what kind of structural arrangements cooperation involves can be argued to contribute to the conceptual ambiguity concerning PPP.
In the first two PPP prototypes proposed here (contracts and organizational PPPs) cooperation involves some degree of institutionalization; i.e.
cooperation is formalized. This is however not the case in relation to the third category – the network PPP. Here the PPP term is used much more broadly and encompasses loosely organized network structures and policy relationships which are
not project based (for instance, Rosenau 2000; Mörth and Sahlin-Andersson 2006;
Marcussen 2007).
The identification of different streams of literature (PPP approaches) and different prototypes of formal structures enables us to navigate more easily in the proliferating PPP literature. A further navigational tool can be added to these tools. The literature can be organized according to four different outlooks/perspectives on PPP (translated from the Danish term ‘blikke’). More specifically, we can distinguish between research that addresses project level, policy level and societal level issues. Finally, there is a fourth category labelled the discursive outlook on PPP, which can be described as a method rather than a distinct level of analysis. Within this latter outlook the researcher critically observes the phenomenon PPP while applying a discursanalytical method of inquiry (for a further elaboration of the four PPP outlooks, see Petersen and Weihe 2007). The majority of the extant research on PPP is related to project and policy level aspects of cooperation; e.g.
descriptions of different types of PPP projects and different issues relating to PPP policies (for some examples, see Osborne 2000; Ghobadian et al. 2004; Hodge and Greve 2005). To a lesser extent PPP is studied as a general societal trend (for examples, see Mörth and Sahlin-Andersson 2006). The same goes for the discursive outlook on PPP (for some examples of this; see Andersen 2006; and Linder 1999).
Let me conclude this section by pointing out that there are cross-country differences in the usage of the PPP term. While in the UK context, for example, PPP is explicitly used by the government as an umbrella term for many different types of public-private arrangements, in other countries, for instance Denmark, the government exclusively uses the term to refer to infrastructure PPPs (in the narrow understanding of the term); i.e. the design, build, finance, operate and maintenance of public infrastructure and associated services for a sustained period of time. In yet other countries, a broad version of the infrastructure PPP is adopted including any sort of infrastructure arrangement that falls between privatization on the one hand and full public provision of collective goods on the other hand (for an example of this approach visit the webpage of the Canadian Council for Public-Private Partnerships; www.pppcouncil.ca). So in different policy contexts PPP can mean different things. This further adds to the conceptual ambiguity.
5 BEYOND CONTRACTS – UNRAVELING PPP PRACTICE