Public-Private Partnerships

Agency Costs in the Privatization of Social Infrastructure Financing

Public-private partnerships (PPPs) have been subjected to considerable public debate. In particular, this debate has concerned PPP financing and its implications. Using insights from agency theory, this study aims to develop a theoretical understanding of PPP financing. The following research question is investigated: How does the privatization of financing decrease or increase agency costs in social infrastructure PPPs? A comparative case study consisting of four Norwegian PPP projects with different financial configurations is undertaken. The findings suggest that the private sector is risk averse, increasing the cost of capital. In addition, private financing does not seem to have the intended incentive effect.
member content locked

Become a PMI member to gain access

or Join

Advertisement

Advertisement

Related Content

  • Project Management Journal

    Improving Project Budget Estimation Accuracy and Precision by Analyzing Reserves for Both Identified and Unidentified Risks member content locked

    By Kwon, Hyukchun | Kang, Chang W. Project risk is a critical factor in estimating project budget. Previous studies on this topic have only addressed estimation methods that consider project budget reserves against identified risks.…

  • PM Network

    Runaway Rail member content open

    By Bishel, Ashley The budget for a troubled rail project in Honolulu, Hawaii, USA has gone off the rails. The estimated budget hit US$8.3 billion in July, a more than 55 percent jump over the initial US$5.3 billion…

  • PM Network

    Charitable Risks member content open

    By Stasik, Trevor A project is a project no matter where you work. But project management in the nonprofit world can bring unique obstacles. Some of these challenges are common among all nonprofits, while others are…

  • PM Network

    On the Horizon member content open

    A mega-mosque construction project is underway in Algiers, Algeria—but its completion date isn't quite clear. At one point scheduled to open this year, the mosque will become the third largest in…

  • The special challenges of project management under fixed-price contracts member content open

    By Lowden, George | Thornton, John Performing a project under a fixed-price contract is more risky than other projects. Fortunately, many of the risks inherent in managing a fixed-price project can be mitigated during the development…

Advertisement