Public-private partnership is a form of business organization

Public-private partnership is often viewed as a form of the state interaction and business, which makes it possible to study features of such an interaction, but questions its optimal effectiveness. The authors consider PPP as a form of business organization too and they show that PPP has advantages in producing public goods over private, state and a number of other organizations of mixed forms. The main outcomes: the main problems of interaction of the state and a private partner include imperfection of the contracts, division of the risk problem, lack of coordination of information flows and goals. The contracts display their gaps and mistakes in the course of implementing the project, so two sides are needed to correct them. They can also be a cause of the project realization delay, and this make projects with a fixed duration less profitable: the shorter the time for the implementation of the project, the more acute is the problem. Reduction of the project deadline is hardly profitable for the municipality as well, because it is pushing the partner for a rapid inefficient solution to the rising problem. Most of the business risks rest with the private partner. Conclusions: cooperation based on the partnership principle stimulates protection of the contracting party, thus solving the problem of contracts imperfection, as the sides make decisions on the rising problems together. The state, keeping to the partnership principle, creates stimuli for private business to join the common goals. Better protection against the risks provides their separation in the frames of partnership. The pooling of resources encourages implementation of projects, exchange of information and co-production.