Public works: better, faster, cheaper infrastructure?

Abstract

Are public-private partnerships (P3s) better, faster, and cheaper, as their proponents suggest? If P3s do not deliver on those promises, how might we explain their perennial appeal? Mutation and malleability have been part of the P3 story since the very beginning. This includes procurement arguments offered in favour of P3s, developments in private finance, and the leading forms of project development. Shapeshifting has, in turn, reconfigured the nature and purpose of public services and works, affecting the ease, possibility, and desirability of returning to the “public” option. Overcoming P3s requires more than addressing issues of profitmaking from public services, a common concern on the Left. It equally calls for addressing how P3s have reconfigured the “public interest” and reoriented state decisionmaking.

Keywords:

• Neoliberalism
• new public management
• privatization
• public interest
• public-private partnerships

Notes

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Gillespie, “Public Structures, Private Money.”

2 Gillespie, “Public Structures, Private Money”; Lindgren, “Ontario Health Minister Tony Clement Says No Idea is Off Limits.”

3 On the Canada Infrastructure Bank as “innovative,” see Whiteside, “The Canada Infrastructure Bank, 223–37.”

4 McDonald, Making Public in a Privatized World.

5 Hodge and Duffield, “The Australian P3 Experience,” 399–438; Loxley, “Public-Private Partnerships After the Global Financial Crisis,” 7–38; Loxley, Public Service, Private Profits; Whiteside, Purchase for Profit.

6 Pal and Maxwell, “Assessing the Public Interest in the 21st Century.”

7 McDonald, Making Public in a Privatized World.

8 Mahon, “Canadian Public Policy.”

9 Esping-Andersen, “The Three Political Economies of the Welfare State,” 92–123.

10 Ysa, “Governance Forms in Urban Public-Private Partnerships”; Hodge and Greve, The Challenge of Public-Private Partnerships.

11 OECD, Public-Private Partnerships, 12.

12 Cohn, “The Public-Private Partnership ‘Fetish’,” 2.

13 See Grimsey and Lewis, Public Private Partnership; Hodge et al., International Handbook on Public-Private Partnerships.

14 Boardman and Vining, “P3s in North America,” 355.

15 McKinsey Global Institute, Infrastructure Productivity.

16 Whiteside, About Canada.

17 Harvey, The New Imperialism; Ashman and Callinicos, “Capital Accumulation and the State System.” P3s often conform most closely with Ashman and Callinicos’s description of recommodification since they are privatizing what used to be public infrastructure and services.

18 Borins, “Trends in Training Public Managers”; Hood, “A Public Management for All Seasons?”; Hughes, Public Administration and Public Management; Osborne and Gaebler, Reinventing Government.

19 Pal, Frontiers of Governance; Holmes and Shand, “Management Reform.”

20 Hughes, Public Administration and Public Management, 3.

21 Olson, Humphrey, and Guthrie, “Caught In an Evaluatory Trap,” 505–22.

22 Olson. et al., “Caught In an Evaluatory Trap,” 513.

23 Hood, “A Public Management for All Seasons?,” 7.

24 Hodge and Greve, The Challenge of Public-Private Partnerships; Iacobacci, Dispelling the Myths ; Loxley, Public Service, Private Profits; Vining and Boardman, “Public-Private Partnerships in Canada,” 9–44.

25 Jooste and Scott, “The Public-Private Partnership Enabling Field,” 150.

26 Rachwalski and Ross, “Running a Government’s P3 Program,” 275–98.

27 Petersen, “Public-Private Partnerships as Converging or Diverging Trends in Public Management?”; van den Hurk, et al., “National Varieties of Public-Private Partnerships (PPPs), ” 1–20.

28 See Whiteside, “Stabilizing Privatization,” 85–108; Whiteside, Purchase for Profit.

29 Whiteside, Purchase for Profit.

30 The summaries here draw on a number of sources, cited in Whiteside, Purchase for Profit; Whiteside, About Canada; Whiteside, “The Canada Infrastructure Bank,” 223–37.

31 Off-book is achieved when infrastructure is accounted for as a series of long-term lease payments rather than as an upfront capital expenditure.

32 Broadbent et al., The Private Finance Initiative in the National Health Service.

33 P3s are presented as a net gain for the taxpayer: even if absolute project costs (e.g. financing, operations, and maintenance) are estimated to be higher than public procurement, P3 value for money is said to be achieved over the lifetime of the project when potential cost overrun risks related to design, construction, financing, operations, and maintenance are transferred to the private partner. It is also believed that the private partner will operate in a more innovative, efficient, and financially prudent manner. See Edwards and Shaoul, “Partnerships,” 397–421.

34 Interestingly, Mildred Warner and Amir Hefetz find that over roughly this same period, 2002–2007, American municipalities were “insourcing” as much as they were outsourcing, using similar rationale as arguments often employed to justify privatization, that is, costs, monitoring, management, and so on. See Warner and Hefetz, “Insourcing and Outsourcing,” 313–27, for more on US reverse privatization dynamics.

35 Brenner et al., “After Neoliberalization?”. See also Peck, “Zombie Neoliberalism and the Ambidextrous State,” 104–110.

36 Brenner et al., “After Neoliberalization?,” 340.

37 McDonald, Making Public in a Privatized World; Cumbers, Reclaiming Public Ownership.

38 McDonald, Making Public in a Privatized World, 2–3.

39 McDonald, Making Public in a Privatized World, 5–9.

40 Cumbers, Reclaiming Public Ownership, 2.

41 Cumbers, Reclaiming Public Ownership, 3.

42 Albo, “The Public Sector Impasse and the Administrative Question,” 113–27.

43 Evans and Shields, “‘Reinventing’ the Third Sector.”

44 Loxley, Public Service, Private Profits.

45 Whiteside, Purchase for Profit.

46 Corbyn, “The Economy in 2020.” See also Murphy, “How Green Infrastructure Quantitative Easing Would Work.”

47 Organisation for Economic Co-operation and Development, “Green Investment Banks.”

48 Marois, How Public Banks Can Help Finance a Green and Just Energy Transformation.

49 Hughes, Public Administration and Public Management.

50 Peck and Tickell, “Neoliberalizing Space,” 380–404.

51 The January 2018 bankruptcy of P3 service-providing giant Carillion demonstrates the bankruptcy of the P3 model—private partners are clearly not inherently superior—at the same time as it indicates just how entangled public and private have become. At the time of writing, only several days after the bankruptcy, it is unclear what will happen with the 6,000 Carillion employees in Canada and the billions of dollars dedicated to multidecade P3 operations contracts awarded to Carillion in health and transportation sectors. As it stands, the public sector in provinces such as Ontario appears unwilling and unable to take this work back in-house despite Carillion’s collapse.

52 Poilievre, “What is Canada’s Infrastructure Bank For?”

53 Taken from, but adapted and augmented: Whiteside, About Canada.

Additional information

Notes on contributors

Heather Whiteside

Heather Whiteside teaches in the Department of Political Science at the University of Waterloo in Waterloo, Ontario, Canada.