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Public-Private Partnerships with Infrastructure Funds: an Optimal Incentive Device

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  • ODA Keiichiro

Abstract

We study the scheme of public-private partnerships (PPP) from an incomplete contracting perspective. We show that PPP can implement an efficient level of investment in a public project with externalities through a bargaining game played by the public sector and the delegated private agent, which functions as a device in internalizing the externalities. Also, we analyze the governance role of an infrastructure fund in PPP through its interaction with the financial market.

Suggested Citation

  • ODA Keiichiro, 2018. "Public-Private Partnerships with Infrastructure Funds: an Optimal Incentive Device," Discussion papers 18085, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:18085
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    References listed on IDEAS

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    1. Oliver Hart, 2003. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," Economic Journal, Royal Economic Society, vol. 113(486), pages 69-76, March.
    2. Bennett, John & Iossa, Elisabetta, 2006. "Building and managing facilities for public services," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2143-2160, November.
    3. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
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