Public-Private Partnerships: the Swiss Specificity

Numéro : 2017-9
Laure Athias, Macina Moudo et Pascal Wicht – Public-Private Partnerships: the Swiss Specificity
Résumé: Since the first implementation of the Private Finance Initiative in the United Kingdom in 1992, the last decades have seen a spectacular development of public-private partnerships (designated as PPPs hereafter) in many (developed as well as developing) countries, in the wake of an increased participation of the private sector in the provision of not only the asset or infrastructure associated with a public service, but also the service itself.
Interestingly to note also that, while most countries have adopted PPPs, the prevalence of such arrangements differs widely across countries and the differences have been persistent. In particular, while around 700 PPP projects have been launched in the United Kingdom between 1994 and 2011, Switzerland has experienced only 2 of such arrangements over the same period of time, and exhibits one of the lowest number of PPPs within OECD countries.
What could explain this Swiss specificity? Is this specificity a good or a bad thing? What is the right number of PPPs? The goal of this chapter is to answer these questions. To this aim, we first define precisely what PPPs are, and what they are not (Section 1). We then develop the theoretical framework that points out the conditions under which PPP arrangements are optimal, or relatively more optimal than the other possible modes of provision (Section 2). This normative analysis highlights that the choice to resort to PPPs should be driven by the characteristics of the public service considered. As we expect public services to be quite similar across countries of similar level of economic development, we can infer that it is only cultural and institutional differences that could help to explain the differences in actually implemented PPPs. We then consider the Swiss cultural and institutional specificities that might lead the number of PPPs to be under optimal in Switzerland but also over optimal in other countries (Section 3). Finally, we conclude with some policy recommendations.
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