Public-private partnerships are not new. As a matter of fact, concessions, the most common form of - PPPs - where the private sector exclusively operates maintains and carries out the development of infrastructure or provides services of general economic interest - date back thousands of years. During the time of the Roman Empire, concessions served as legal instruments for road construction, public baths and the running of markets. Other famous examples include medieval Europe, where as early as 1438, a French nobleman named Luis de Bernam was granted a river concession to charge the fees for goods transported on the Rhine.3 Examples abound since the turn of the seventeenth and eighteenth century with many infrastructure facilities (water channels, roads, railways) in Europe and later in America, China and Japan privately funded under concession contracts.
While the practice has been around for millennia, the term "Private-Public Partnership" or PPP was coined and popularized in the 1970s, when neo-liberal ideas began questioning the previously dominant Keynesian paradigm and the role of the state in the context of poor economic performance. Instead of ascribing poor economic performance to the failures or inadequacies of the market, government failure or inefficiency was blamed. 4 New ideas, such as New Public Management (NPM), became the new vogue. In this context, PPPs were often invoked as alternatives to bureaucratic public services and inefficient state owned enterprises, often for the promotion of privatization (Cavelty and Sute 2009). It was argued that handing over public tasks to private actors, (i.e., to privatize them, or to contract them out, or at least to carry them out in partnership with private businesses) was the main means to downsize the role of the state, to enhance the efficiency of the public administration and public service provision, and to reverse previously alleged crowding out of the private sector by state owned enterprises (see, Savas 1982).
Initially, PPPs involved urban construction projects to facilitate joint development and renewal of problematic urban zones (Budäus and Grüning 2004). The modern version of PPPs - whereby the private company is paid by the government rather than by consumers - evolved in the UK in the 1980s ostensibly to enable the government to develop infrastructure while adhering to strict borrowing limits or fiscal rules to address rising public debt. PPPs were seen as mobilizing private finance for public ends, under the rubric of the private finance initiative (PFI). Over time, the concept of PPPs expanded to include joint technology or ecological projects, as well as partnerships in the area of education, health services, and prison incarceration (see, Vaillancourt 2000). It has become an extremely heterogeneous concept and, according to the critics (e.g. Linder 2000), it has now evolved into a catchall label for all possible new or known forms of collaboration between the public administration and the private sector.
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3 See, for example, Bezançon, 2004.
4 For more on the impact of monetarist and neoclassical theories on PPPs in the 1970s, see for example: Gomes, 1990, p. 170.