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Regular version of the site

Article

Public Procurement Mechanisms for Public-Private Partnerships

Journal of Public Procurement. 2014. Vol. 14. No. 4. P. 538-566.
Vinogradov D., Shadrina E. V., Kokareva L.

 ABSTRACT. Why do some countries (often developing and emerging

economies) adopt special laws on PPP, whilst in others PPPs are governed

by the legislation on public procurement and related bylaws? This paper

explains the above global discrepancies from an institutional perspective. In

a contract-theoretical framework we demonstrate how PPPs can enable

projects that are not feasible through standard public procurement

arrangements. Incentives for private partners are created through extra

benefits (often non-contractible) from their collaboration with the

government (e.g. risk reduction, reputational gains, access to additional

resources, lower bureaucratic burden, etc.). In a well-developed institutional

environment these benefits are implicitly guaranteed, suggesting no need in

a specialized PPP-enabling legislation. Otherwise, a PPP law should establish

an institutional architecture to provide the above benefits.