Addressing the Missing Link in PPP Projects: What Constitutes the Public?

Public private partnerships (PPPs), as new organizational forms, are intended to respond to societal problems previously held as intractable. In all countries, the originality of PPPs raises new questions of governance, which include the problem of sharing economic, social, and political responsibility among various segments of society in the development of the country; and the adoption of new institutional forms to enhance the efficiency of government action. These concerns are raised in both developed and developing countries, but with greater acuteness in the latter. In all cases, the central question regarding the relation between the public and private sectors is that which constitutes the public side of the partnership. This paper traces historical and contemporary developments in the need for PPPs; and current public protests against PPPs, which are perceived as impositions to the desires of the greater public. Using a principal-agent model as a lens, this paper provides a detailed understanding of what constitutes the first “P” (the public) in a PPP construct and shows how many current approaches in PPP project arrangements have failed to embrace the real public (an inclusive approach) and have instead been dominated by the artificial public agent (an exclusive approach). The paper provides an appropriate definition of the public and recommends the need for a paradigm shift from exclusion to inclusion in PPP arrangements.