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Abstract
The transformation of public infrastructure and services into vehicles of profit-making through privately financed and operated partnerships (PPPs) has successfully weathered high profile project failures, changes in government, scathing audits, public resistance, financial crises, fiscal austerity, and found a home around the world despite vastly different legal, cultural, and institutional contexts. Public procurement and traditional budgeting practices are now a distant memory in many jurisdictions – not by happenstance but through dogged efforts to transform public sectors from service provider into commodity purchaser. Understanding the political economy of global PPP markets requires knowing the connection to managerialism underpinning the story of public administration as contract management. This paper explores the emergence, sophistication, and normalization of PPP using primary and secondary sources including interviews with those involved in, or keenly aware of, the historical creation of pioneering PPP markets. It identifies three apposite categories of PPP management: models, methods, and mindsets. Models are homogenously portable yet malleable templates for partnering. Methods include accounting treatment and standards, and new budgeting and tendering practices. Mindsets are the ideas and ideals initially spread by enthusiasts like the Big Five consultancy firms and Macquarie Bank, later entrenched through specialized quasi-public agencies such as Partnerships UK and the World Bank’s PPIAF.
Acknowledgements
Thanks to Samuel Knafo and Matthew Eagleton-Pierce, along with the RIPE editors and anonymous reviewers, for their helpful suggestions along the way. This research was funded by a Social Sciences and Humanities Research Council of Canada Postdoctoral Fellowship (756-2013-0023).
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 In-person, semistructured, confidential interviews were conducted between 2013 and 2015 with government policy makers, experts (accountants, auditors, academics) and consultants, unions, bureaucrats, and upper echelon PPP private partner and public partner actors.
2 The ‘traditional public administration’ is a hybrid of Weberian, Taylorist, and managerialist currents that coalesced in the early 20th century representing an ideal type than could seldom be found in practice (Hughes, Citation2003); however, it was nevertheless the model that advocates of New Pubic Management sought to overturn.
3 PPP policy expert, interviewed in London, UK, July, 2015.
4 However, as Petersen (Citation2011) points out, the PPP model may be widespread but it is not as though all countries equally embrace it. Enthusiasts include the UK, Ireland, Canada, Australia, Portugal, and Spain; skeptics include Scandinavia, Austria, Belgium, and Luxembourg; and countries with sophisticated PPP policies but relatively few projects include the Netherlands, France, Germany, Greece, Hungary, and Poland (Petersen, Citation2011).
5 PPP policy expert, interviewed in London, UK, July, 2014.
6 PPP policy expert, interviewed in Adelaide, Australia, December, 2014.
7 PPP policy expert, interviewed in Adelaide, Australia, December, 2014.
8 PPP policy expert, interviewed in Adelaide, Australia, December, 2014.
9 Public sector auditor, interviewed in Canberra, Australia, December, 2014.
10 British PFI/PPP policy advisor, interviewed in London, UK, July 2014.
11 This is not to say that resistance was altogether lacking, instead it was accommodated through measures such as the Transfer of Undertakings and Protection of Employment (TUPE) arrangements and the Retention of Employment (RoE) model which provided some safeguards for public sector employees shunted into the private sector, ensuring, for example, that original employment arrangements are upheld. However, TUPE is a voluntary code not a mandatory one and recent policy changes have excluded schools and local government, and allow employers to change the terms of employment conditions after one year. With employers essentially able to opt out of TUPE, the benefits provided by its protections are illusory and subject to the benevolence of PPP private partners.
12 PPP policy expert, interviewed in Sydney, Australia, December, 2014.
13 PPP accountancy expert, interviewed in Sydney, Australia, December, 2014.
14 Senior bureaucrat and PPP policymaker, interviewed in Sydney, Australia, December, 2014.
15 PPP policy advisor, interviewed in Sydney, Australia, December, 2014.
16 Senior bureaucrat and PPP policymaker, interviewed in Sydney, Australia, December, 2014.
17 PPP accountancy expert, interviewed in London, UK, July, 2014.
18 PPP auditor, interviewed in Canberra, Australia, December, 2014.
19 PPP accountancy expert, interviewed in Sydney, Australia, December, 2014.
20 PPP policy exert, interviewed in Adelaide, Australia, December, 2014.
21 PPP policy exert, interviewed in Sydney, Australia, December, 2014.
22 PPP accountancy expert, interviewed in Sydney, Australia, December, 2014.
23 This paper focused mainly on demand-side aspects of PPP management, however, future research would benefit from expanded supply-side accounts of managerialism within PPP-promoting organizations like business schools, financial institutions, and consultancy firms.
24 PPP policy expert, interviewed in London, UK, July, 2014.
Additional information
Notes on contributors
Heather Whiteside
Heather Whiteside is Assistant Professor of Political Science at the University of Waterloo and Fellow at the Balsillie School of International Affairs. Her research and writing centre on theories and practices of privatization, financialization, and fiscal austerity. She is currently writing books on Theories of Political Economy, Canadian Political Economy, and Varieties of Austerity. Her published books are: About Canada: Public-Private Partnerships, Purchase for Profit: public-private partnerships and Canada’s public health care system, and Private Affluence, Public Austerity; and she has published in journals such as Urban Studies, Economic Geography, Studies in Political Economy, and Health Sociology Review. She is co-coordinator of the Waterloo Political Economy Group (WatPEG) and an Associate Editor of the journal Studies in Political Economy. Her current grants are: Austerity and Its Alternatives (Social Sciences and Humanities Research Council of Canada, Partnership Development Grant), and Varieties of Austerity (Social Sciences and Humanities Research Council of Canada, Insight Grant).