PPPs institutionalize the relationship between the partners and stakeholders for managing long-term infrastructure contract characterized by risk sharing and high deal complexity. So far, the focus on PPP has been principally concentrated on the constitutive moment of the public-private cooperation, on the new PPP participatory institutional-relationships, and a new contract type. Yet, the participatory approach offers also a light on the operational aspect of PPPs after the procurement process, in the most dynamic phase of construction and operation. There, on the one hand, the same nature of PPPs, characterized by a public-private risk sharing due to a market failure, suggests an approach that attempts to avoid the wholesale shifting of commercial and investment risks to actors who are divorced from the political economy of service provision. On the other hand, it looks to mechanism for adapting incomplete contractual commitments to the change of circumstances that may affect the economic and financial equilibrium as well as the social demands of the public. It is in that phase that "institutional momentum" regains, in PPPs, a principal role for managing those changes.
PPP is a pragmatic attempt to go beyond a relationship of the two parties based on highly regulated contracts which results to be less suitable for situations in which project and/or goals can hardly be specified, are characterized by interdependence or new creative solutions are needed. Furthermore, PPPs take into account the aspect of the uncertainty of the future and the knowledge that not everything can be written into detailed contracts. Where extremely complex contracts were needed, the high cost of designing, monitoring and enforcing these contracts may make the PA better off unbundling construction and operation or undertaking public works, unless relational contracts can be set up. PPPs suggest a new partnership-based approach to contracting.
PPPs aim at overtaking confrontational contracting through institutional cooperation. Instead of persuading a misleading public-private contracting which is based on the mutual attempt to take advantage of the other party, in PPPs both parties find it advantageous to find ways to helping each other to be successful.14
"Rather than relying on the bargaining of individuals in one or a series of negotiations to generate collective actions, the actors involved instead choose to create an organization (or an "institution"). That institution will solidify the meta-level bargains made, and provides the basis for a continuing exchange within a set of mutually agreed rules". Therefore, "PPPs can be seen as stable institutional structures that are governed by shared understandings of priorities and values, as well as by sets of rules that have been mutually agreed upon by the partners. This stability and institutionalization can be seen as a mechanism for reducing transaction costs and facilitating decisions through creating common perspectives on policy". 15
The achievement of synergies, the research for innovative solutions, and the interaction of multiple players require exchange of information and ideas between the partners. If the reason of being of PPP is the creation of extra value because of the cooperation of the public and private partners16, the extra value of PPP has to be greater than the extra organization, transaction and agency costs that results form the more intense forms of coordination. To do so, the tensions that arise from the interdependency and competing self-interests of the partners have to be mitigated through interaction and negotiation processes during the long period the partners are tied together. Mechanism and rules that support a cooperative interaction have to be developed, and the parties have to focus on "project" as much as on "process" management and, eventually updating and redesigning those process.
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14 BOVAIRD T., cit. pp. 199
15 PETERS B. G., cit. pp.15
16 BORYS B. - JEMISON D. B (1989) "Hybrid arrangements as strategic alliance: Theoretical issues in organizational combinations, Academy of Management Review, 14 (2);