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“When politics and lobbyism combine to promote white elephants by using PPPs”

Author

Listed:
  • Daniel Albalate

    (Universitat de Barcelona, Departament d’Estadística, Econometria i Economia Aplicada, Avda. Diagonal 690, 08034 (Barcelona), Telf: +34.93.4031131)

  • Germà Bel

    (Department of Econometrics, Statistics and Applied Economics & GiM-IREA University of Barcelona. C/ John Keynes 1-11, 08034 Barcelona. Tel: 34.93.4031131 Fax: 34.93.4024573)

  • Albert Gragera

    (Technical University of Denmark, Produktionstorvet Building 426, 2800 Kgs. Lyngby, Denmark.)

Abstract

Theoretical insights into the cooperation between public and private partners (PPPs) suggest that they can be an effective tool for preventing ‘white elephant’ type projects. However, various case studies have shown that this belief is largely dependent on the effective transfer of operational risk to the private partner, and on the application of user-pay funding. This paper goes one step further and explores the idea that private partners that participate in PPPs with no substantial risk transfer – and under heavily subsidized schemes – can act as lobbies, exerting pressure to develop white elephants.

Suggested Citation

  • Daniel Albalate & Germà Bel & Albert Gragera, 2018. "“When politics and lobbyism combine to promote white elephants by using PPPs”," IREA Working Papers 201823, University of Barcelona, Research Institute of Applied Economics, revised Oct 2018.
    • Handle: RePEc:ira:wpaper:201823
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    File URL: http://www.ub.edu/irea/working_papers/2018/201823.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    PPP; political favoritism; infrastructure; JEL classification: L14; L33; L51.;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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