Public private partnerships: building relationships between their governance and transaction costs

Rogerio Thamer, Mario Henrique Ogasavara
DOI: https://doi.org/10.21529/RECADM.2023002

Abstract

Public-Private Partnerships (PPPs) are collaborative arrangements between governments and private entities that aim at greater efficiency in the delivery of public services. With their use increasing, PPPs can face transaction costs that harm their social and financial results. The objective of this work is to evaluate the adoption of specific governance elements in Public-Private Partnership contracts (ex-ante) and their impact on the reduction of transaction costs during these contracts (ex-post). Based on a literature review, this research presents propositions that relate governance mechanisms defined in the contract with the transaction costs that negatively affect these partnerships. As a contribution, a framework is proposed that takes into account the main stakeholders involved and emphasizes the importance of standardizing certain elements in partnership contracts, seeking an alignment between governance structures and the different characteristics of transactions during PPPs, helping public managers and private entities responsible for defining these contracts.


Keywords

public-private partnership; transaction costs; incomplete contracts; governance elements; theoretical framework

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