IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v48y2017icp141-146.html
   My bibliography  Save this article

Why not regulate PPPs?

Author

Listed:
  • Marques, Rui Cunha

Abstract

Regulation of public utilities and infrastructure is being generalized worldwide. However, when there are public-private partnership arrangements, it is assumed that the contract signed by the parties is adequate to protect the public interest, and therefore, external regulation is not necessary. Even though explicit regulation also has its shortcomings, we disagree with the preconceived idea that contracts alone always protect the public interest. Contracts avoid the discretion left to regulators, but they are imperfect and incomplete. Therefore, we defend the need for regulation and posit that it should be combined with a contract, resulting in a game of positive sum.

Suggested Citation

  • Marques, Rui Cunha, 2017. "Why not regulate PPPs?," Utilities Policy, Elsevier, vol. 48(C), pages 141-146.
    • Handle: RePEc:eee:juipol:v:48:y:2017:i:c:p:141-146
    DOI: 10.1016/j.jup.2017.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178716303599
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2017.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manuel A. Abdala, 2001. "Institutions, Contracts And Regulation Of Infrastructure In Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 4, pages 217-254, November.
    2. Littlechild Stephen, 2002. "Competitive Bidding for a Long-Term Electricity Distribution Contract," Review of Network Economics, De Gruyter, vol. 1(1), pages 1-38, March.
    3. Hart, Oliver D, 1988. "Incomplete Contracts and the Theory of the Firm," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 119-139, Spring.
    4. de Brux, Julie, 2010. "The Dark and Bright Sides of Renegotiation: An Application to Transport Concession Contracts," Utilities Policy, Elsevier, vol. 18(2), pages 77-85, June.
    5. Kristof De Witte & Rui Marques, 2010. "Designing performance incentives, an international benchmark study in the water sector," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(2), pages 189-220, June.
    6. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications - Books, The World Bank Group, number 15024.
    7. Baldwin, Robert & Cave, Martin & Lodge, Martin, 2011. "Understanding Regulation: Theory, Strategy, and Practice," OUP Catalogue, Oxford University Press, edition 2, number 9780199576098.
    8. Berg, Sanford V., 2013. "Best practices in regulating State-owned and municipal water utilities," Documentos de Proyectos 4079, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Steven Tadelis, 2009. "Auctions Versus Negotiations in Procurement: An Empirical Analysis," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 25(2), pages 372-399, October.
    10. Carlos Oliveira Cruz & Rui Cunha Marques, 2013. "Infrastructure Public-Private Partnerships," Springer Books, Springer, edition 127, number 978-3-642-36910-0, December.
    11. W. Kip Viscusi & Joseph E. Harrington & John M. Vernon, 2005. "Economics of Regulation and Antitrust, 4th Edition," MIT Press Books, The MIT Press, edition 4, volume 1, number 026222075x, April.
    12. Patrick Bajari & Stephanie Houghton & Steve Tadelis, 2006. "Bidding for Incomplete Contracts: An Empirical Analysis," NBER Working Papers 12051, National Bureau of Economic Research, Inc.
    13. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-785, July.
    14. Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2009. "Soft Budgets and Renegotiations in Public-Private Partnerships," Cowles Foundation Discussion Papers 1723, Cowles Foundation for Research in Economics, Yale University.
    15. Pablo T. Spiller, 2009. "An Institutional Theory of Public Contracts: Regulatory Implications," Chapters, in: Claude Ménard & Michel Ghertman (ed.), Regulation, Deregulation, Reregulation, chapter 3, Edward Elgar Publishing.
    16. Beecher, Janice A. & Kalmbach, Jason A., 2013. "Structure, regulation, and pricing of water in the United States: A study of the Great Lakes region," Utilities Policy, Elsevier, vol. 24(C), pages 32-47.
    17. Marques, Rui Cunha & Berg, Sanford V, 2010. "Revisiting the strengths and limitations of regulatory contracts in infrastructure industries," MPRA Paper 32890, University Library of Munich, Germany.
    18. Philippe Burger & Ian Hawkesworth, 2011. "How To Attain Value for Money: Comparing PPP and Traditional Infrastructure Public Procurement," OECD Journal on Budgeting, OECD Publishing, vol. 11(1), pages 91-146.
    19. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    20. Massarutto, Antonio & Ermano, Paolo, 2013. "Drowned in an inch of water," Utilities Policy, Elsevier, vol. 24(C), pages 20-31.
    21. Victor P. Goldberg, 1976. "Regulation and Administered Contracts," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 426-448, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robert Osei-Kyei & Albert P. C. Chan & Yao Yu & Chuan Chen & Yongjian Ke & Bashir Tijani, 2019. "Social Responsibility Initiatives for Public-Private Partnership Projects: A Comparative Study between China and Ghana," Sustainability, MDPI, vol. 11(5), pages 1-14, March.
    2. Maryati, Sri & Humaira, An Nisaa Siti & Afriana, Anita & Roekmi, Raden Ajeng Koesoemo & Suhartini, Ninik, 2021. "Developer behavior in local infrastructure provision in Indonesia: Implications for policy," Utilities Policy, Elsevier, vol. 70(C).
    3. Rui Domingos Ribeiro da Cunha Marques & Hugo Consci?ncia Silvestre, 2019. "Does Regulation Really Work? A Principal-agent Approach to the Portuguese Waste Services," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2019(1), pages 49-67.
    4. Nannan Wang & Minxun Ma & Yunfei Liu, 2020. "The Whole Lifecycle Management Efficiency of the Public Sector in PPP Infrastructure Projects," Sustainability, MDPI, vol. 12(7), pages 1-17, April.
    5. Takano, Guillermo, 2017. "Public-Private Partnerships as rent-seeking opportunities: A case study on an unsolicited proposal in Lima, Peru," Utilities Policy, Elsevier, vol. 48(C), pages 184-194.
    6. Narzetti, Daniel Antonio & Marques, Rui Cunha, 2021. "Isomorphic mimicry and the effectiveness of water-sector reforms in Brazil," Utilities Policy, Elsevier, vol. 70(C).
    7. Wang, Nannan & Gong, Zheng & Liu, Yunfei & Thomson, Craig, 2020. "The influence of governance on the implementation of Public-Private Partnerships in the United Kingdom and China: A systematic comparison," Utilities Policy, Elsevier, vol. 64(C).
    8. Jiangfan Liu & Xiongzhi Xue, 2018. "River Management for Local Governments in China: From Public to Private," IJERPH, MDPI, vol. 15(10), pages 1-11, October.
    9. Moore, Mark A. & Boardman, Anthony E. & Vining, Aidan R., 2017. "Analyzing risk in PPP provision of utility services: A social welfare perspective," Utilities Policy, Elsevier, vol. 48(C), pages 210-218.
    10. Avdasheva, Svetlana & Gimadi, Victoria, 2019. "Investor response to tariff options under regulation by contract: Evidence from Russian heating concessions," Utilities Policy, Elsevier, vol. 57(C), pages 67-74.
    11. Romano, Patrícia Ribeiro & Bezerra Sampaio, Raquel Menezes, 2023. "Road concessions: Evidence of the effects of improving the transport infrastructure on economic development in Brazil," Transport Policy, Elsevier, vol. 142(C), pages 115-124.
    12. Bao, Fengyu & Martek, Igor & Chan, Albert P.C. & Chen, Chuan & Yang, Yang & Yu, Heng, 2023. "Assessing the public-private partnership handover: Experience from China's water sector," Utilities Policy, Elsevier, vol. 80(C).
    13. Cahn, Amir & Katz, David & Ghermandi, Andrea & Prevos, Peter, 2023. "Adoption of data-as-a-service by water and wastewater utilities," Utilities Policy, Elsevier, vol. 81(C).
    14. Lima, Sónia & Brochado, Ana & Marques, Rui Cunha, 2021. "Public-private partnerships in the water sector: A review," Utilities Policy, Elsevier, vol. 69(C).
    15. Singh, Kewal & Singh, Anoop & Prakash, Puneet, 2022. "Estimating the cost of equity for the regulated energy and infrastructure sectors in India," Utilities Policy, Elsevier, vol. 74(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marques, Rui Cunha & Berg, Sanford V, 2010. "Revisiting the strengths and limitations of regulatory contracts in infrastructure industries," MPRA Paper 32890, University Library of Munich, Germany.
    2. Dimas de Castro e Silva Neto & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2017. "Understanding the patterns of PPP renegotiations for infrastructure projects in Latin America," Competition and Regulation in Network Industries, , vol. 18(3-4), pages 271-296, September.
    3. Jensen, Olivia & Wu, Xun, 2017. "The hybrid model for economic regulation of water utilities: Mission impossible?," Utilities Policy, Elsevier, vol. 48(C), pages 122-131.
    4. Eshien Chong & Carine Staropoli & Anne Yvrande-Billon, 2014. "Auction versus Negotiation in Public Procurement: Looking for Empirical Evidence," Post-Print hal-00512813, HAL.
    5. da Cruz, Nuno F. & Marques, Rui Cunha, 2013. "Mixed companies as local utilities," LSE Research Online Documents on Economics 59761, London School of Economics and Political Science, LSE Library.
    6. Jean Beuve & Marian W Moszoro & Pablo T Spiller, 2023. "Doing It by the Book: Political Contestability and Public Contract Renegotiations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(1), pages 281-308.
    7. Sarmento, Joaquim Miranda & Renneboog, Luc, 2021. "Renegotiating public-private partnerships," Journal of Multinational Financial Management, Elsevier, vol. 59(C).
    8. Anne Yvrande‐Billon, 2006. "The Attribution Process Of Delegation Contracts In The French Urban Public Transport Sector: Why Competitive Tendering Is A Myth," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 453-478, December.
    9. repec:hal:wpaper:hal-00512813 is not listed on IDEAS
    10. da Cruz, Nuno F. & Marques, Rui Cunha, 2012. "Mixed companies and local governance: no man can serve two masters," LSE Research Online Documents on Economics 59778, London School of Economics and Political Science, LSE Library.
    11. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.
    12. Amaral, Miguel & Saussier, Stéphane & Yvrande-Billon, Anne, 2009. "Auction procedures and competition in public services: The case of urban public transport in France and London," Utilities Policy, Elsevier, vol. 17(2), pages 166-175, June.
    13. Daniel Albalate & Germà Bel & Joan Calzada, 2010. "Urban transport governance reform in Barcelona," IREA Working Papers 201009, University of Barcelona, Research Institute of Applied Economics, revised Jun 2010.
    14. Kokkaew, Nakhon & Oliveira Cruz, Carlos & Alexander, Derek, 2015. "The impact of rule of laws on the recovery of distressed PPP infrastructure Projects," MPRA Paper 77494, University Library of Munich, Germany.
    15. Ruiz Diaz, Gonzalo, 2017. "The contractual and administrative regulation of public-private partnership," Utilities Policy, Elsevier, vol. 48(C), pages 109-121.
    16. Athias, Laure & Saussier, Stéphane, 2018. "Are public private partnerships that rigid? And why? Evidence from price provisions in French toll road concession contracts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 174-186.
    17. Christian Jaag & Urs Trinkner, 2011. "A General Framework for Regulation and Liberalization in Network Industries," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 3, Edward Elgar Publishing.
    18. Guasch, J. Luis & Laffont, Jean-Jacques & Straub, Stéphane, 2008. "Renegotiation of concession contracts in Latin America: Evidence from the water and transport sectors," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 421-442, March.
    19. Eshien Chong & Freddy Huet & Stéphane Saussier, 2006. "Auctions, Ex Post Competition And Prices: The Efficiency Of Public‐Private Partnerships," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 521-554, December.
    20. J. Luis Guasch & Jean-Jacques Laffont & Stéphane Straub, 2007. "Concessions of infrastructure in Latin America: Government-led renegotiation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1267-1294.
    21. Ricardo Ferreira Reis & Joaquim Miranda Sarmento, 2019. "“Cutting costs to the bone”: the Portuguese experience in renegotiating public private partnerships highways during the financial crisis," Transportation, Springer, vol. 46(1), pages 285-302, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:48:y:2017:i:c:p:141-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.