One of the main drivers for the utilisation of PPPs has been the emergence of a number of new philosophies to describe the reform of public administration and enhance the provision of public services (English & Guthrie, 2003; Thai, 2005). Within this framework, PPPs are seen as an approach to making the most of scarce resources (often created by the reduction of taxes) and competencies, the best use of both the private and public sector, a means of exploring the potential of innovative mechanisms for public services provision (Bovaird, 2004; Teicher et al., 2006) and to harness the capabilities of the private sector. It is also envisaged that PPPs are able to solve a number of wicked problems in a society which seemingly cannot be resolved by government alone. The necessity to solve the wicked problems (Rittel & Webber, 1973) imposes a need for governments to work in cooperation with a wide range of organisations such as not-for-profit and the private sectors (Bovaird, 2004). According to Bovaird (2004) and Teicher et al. (2006), however, it has been demonstrated in practice that the New Public Management (NPM) governance model is far from perfect. Long-term partnerships, promoted by the NPM, are undermining competition between potential providers. Another criticism is that NPM is ignoring public opinion and focusing mainly on cost efficiencies. Therefore, a need has emerged for new governance models that consider public opinion and take into account equity and accountability.
The public value model is one of the ideologies that have emerged as a way to ensure citizens can participate in the decision making process (Teicher et al., 2006). According to Bovaird (2004), the public governance paradigm which evolved during the 1990s significantly modifies many of the concepts that underpin NPM. A fundamental characteristic of the shift in paradigm is a new governance mechanism that aims to create trust, improve transparency, increase accountability, increase efficiency and allow greater citizen participation. Some of these attributes are seen to be essential in order to build upon the current knowledge in relation to PPPs (Bovaird, 2004; Teicher et al., 2006). Implementing these improvements within PPPs is expected to reduce the pressure on government budgets and achieve better value for money in the provision of public infrastructure and share risks (Teicher et al., 2006; Hodge & Greve, 2007).
Apart from the commitment to the contemporary NPM framework, other key factors that contribute to the development and implementation of PPPs are: the expectations of citizens for a high level of public services provision; an assumption that citizens are resistant to paying higher tax; public choice; the need to reduce public debt; commitment to reducing the role of government in the ownership of assets and direct delivery of services; and governments' focus on core competencies and elimination of non-efficient operations (English & Guthrie, 2003; Thai, 2005; Teicher et al., 2006). Furthermore, the fact that governments struggle to deliver projects of high importance within planned budgets has also motivated government to explore the utilisation of emerging PPP concepts. Key players in this movement have been banks and private equity groups (Jones, 2005).