Public Management Review

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Public–private partnership in Public Administration

discipline: a literature review

Huanming Wang, Wei Xiong, Guangdong Wu & Dajian Zhu

To cite this article: Huanming Wang, Wei Xiong, Guangdong Wu & Dajian Zhu (2018)
Public–private partnership in Public Administration discipline: a literature review, Public
Management Review, 20:2, 293-316, DOI: 10.1080/14719037.2017.1313445

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PUBLIC MANAGEMENT REVIEW, 2018
VOL. 20, NO. 2, 293–316
https://doi.org/10.1080/14719037.2017.1313445

Public–private partnership in Public Administration

discipline: a literature review
Huanming Wanga, Wei Xiongb, Guangdong Wuc and Dajian Zhub
a
Faculty of Humanities and Social Sciences, Dalian University of Technology, Dalian, Liaoning
Province, China; bSchool of Economics and Management, Tongji University, Shanghai, China;
c
School of Tourism and Urban Management, Jiangxi University of Finance and Economics,
Nanchang, Jiangxi Province, China

ABSTRACT
Public–private partnerships (PPPs) have become popular tools to deliver infrastruc-
ture and public services around the world. As an innovative public procurement
approach, PPPs have drawn considerable attention from academic circles. In order to
enhance our knowledge of PPPs, the authors conducted a systematic literature
review of articles published in international journals of the Public Administration
(PA) discipline. Four main topics in this discipline are identified by means of social
network analysis, including PPP concept, risk sharing amongst PPP participants, the
drivers of PPP adoption, and PPP performance. Seven propositions about the four
topics are summarized. Directions for future research are also considered.

KEYWORDS Public–private partnership; Public Administration discipline; literature review

Introduction
Public–private partnerships (PPPs), as cooperative institutional arrangements
between public and private sectors, have received considerable attention over the
past 40 years. PPP has been widely used in the fields of infrastructure and public
services, such as transportation, water and sewage, energy, environment protection,
public health, and others. Many countries and regions have been promoting PPP to
overcome the traditional drawbacks of public procurement. The UK, Australia,
Portugal, Spain, and other developed countries have witnessed a steady growth in
the number of PPP projects. Developing countries are also using PPPs to build and
operate their own infrastructures. For instance, until 30 September 2016, China had
witnessed no fewer than 10,471 PPP projects. The total investment in these projects
has amounted to 12.46 trillion Yuan.1
At the same time, the literature addressing PPP has also shown impressive growth.
Some authors suggest that the PPP phenomenon has become a new form of govern-
ance (Osborne 2000). Many governments around the world are becoming more and
more dependent on private actors for the implementation of public policies.
However, this means governments need cooperation from various actors (Teisman
and Klijn 2002). In this respect, PPP can be seen as a cooperative institutional

CONTACT Wei Xiong kevinxiong@tongji.edu.cn

© 2017 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives
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duction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.
294 H. WANG ET AL.

arrangement between public and private sector actors (Hodge and Greve 2007). PPP
might very well be able to deal with the complex policies, projects, and public service
issues to be faced. This is because PPP involves joint development and risk sharing
between the partners, which are areas the traditional procurement processes failed to
address. This finding implies that the PPP phenomenon has transformed into a type
of governance scheme or mechanism, rather than just being some sort of language
game. However, it is not an easy task to convert a theory or idea into actions. For
instance, some research has found that many actors are far too preoccupied with their
own procedures and internal issues to be able to act as effective partners (Klijn and
Teisman 2003).
Thus, the PPP phenomenon has attracted considerable attention from many
scholars and many areas of interest, including disciplines ranging from Economics
to Management Science and Public Administration (PA) (Spielman, Hartwich, and
Grebmer 2010). The approach to the study of PPPs, particularly when it comes to the
disciplines of Economics and Management Science, is from the perspective of PPP
being a kind of micro-level partnership. Researchers from these two fields focus on
how to design, tender, operate, and maintain PPP projects. For instance, a great deal
of the work conducted by economists on PPP has been concerned with the optimality
of the bundling of the various tasks (e.g. design, tender, and operations) rather than
on how each task can be completed by a single partner (Ross and Yan 2015). Some
authors used the papers in the construction journals to show the PPP research topics
and trend (Ke et al. 2009). However, we have not yet been able to find any articles
which discuss the PPP research process from the PA perspective. In this article, we
are trying to fill this gap and understand how scholars from the PA perspective look
at PPP. This study addresses the following questions:

(1) What are the prevailing themes of PPP in the PA discipline journals?
(2) What are the main contributions of those themes by combining a subjective
and objective judgement?

To answer those questions, this study conducts a systematic literature review

(SLR) about PPP in the PA discipline. The main results show that, although PPP
has become a popular approach to supply infrastructure and public services, there is
no general agreement on their definition, risk management, drivers of adoption of
PPP, and performance evaluation. This study offers seven propositions concerning
those issues. Besides, the results are useful for both PPP researchers and policymakers
to identify the key issues and tendency.

Samples and method

An SLR method differs from traditional narrative methods, because the former has a
more explicit selection process for articles (Torchia, Calabro, and Morner 2015). All
previously published journal articles in the discipline of PA are identified via the ISI
Web of Science Database. This database contains all such articles from all past years,
prior to 31 December 2016. Taking the whole sample study could reduce the bias that
would be generated from selecting only small samples, thus making our study more
reliable and transparent (Ferrer, Thome, and Scavarda forthcoming). Five steps were
 PUBLIC MANAGEMENT REVIEW 295

Planning and formulating problem

Step 1
Understand the main themes of PPP
in the Public Administration
discipline

Searching literature
Step 2

186 articles

Using the ISI Web of Science

Data gathering and evaluating

Step 3

General
description
Making some basic statistic issues

Data analysis and interpretation

The main
Step 4

topics
Combination of subjective and
objective analysis

Presenting results
Step 5

Discussion, conclusion and future

research direction

Figure 1. Summary of the systematic review process.

required to conduct the SLR (see Figure 1), as follows:

Step 1: Planning and formulating the problem. The authors discussed the research
questions and understood the main themes of PPP in the PA discipline.
Step 2: Searching the literature. Using ISI Web of Science, we expanded the
research period from the earliest available date up to 30 December 2016. The
search settings in the database were: Title = Public-Private Partnership or PPP
or Private Finance Initiatives or Build Operate Transfer or BOT or Design Build
Finance Maintain or DBFM or Transfer Operate Transfer or Build Operate
Own Transfer. Time span = all years. Discipline = public administration or
political science. Types = articles. This research yielded 186 articles.
Step 3: Data gathering and quality evaluating. After selecting the articles, we
made some basic statistic issues like the years of publication, countries of
analysis, journal titles, citations per author, and main theories used to study
PPP. Then, we selected the keywords and used social network to display the
main topics.
Step 4: Data analysis and interpretation. We read the entirety of the selected
articles, including the aims of the research, framework, method, results, and
296 H. WANG ET AL.

conclusions. This step used an inductive approach to qualitative content analy-

sis complemented with a quantitative visualization co-word analysis.
Step 5: Presenting the results and addressing the future research direction.

General description
This section presents the results of our SLR, including the years of publication,
countries of analysis, journal titles, citations per author, and the main research
theories and topics of those articles.

Evolution over time

As shown in Figure 2, current trend shows that the number of articles relating to PPP
is steadily increasing. The articles have been indexed by ISI Web of Science since
1983, and the research peak (relating to PPP) appeared in 2016. We can claim that, in
recent years, PPP has been a popular topic in the PA discipline.

Country of analysis
The countries selected for analysis are scattered all over the world. For the purposes
of this study, we only selected countries that were analysed at least by two PPP-
related articles. In Figure 3, we see that the majority of PPP articles focus on the UK.
This finding is not surprising because the UK was the first country to adopt Private
Finance Initiatives (PFIs). Moreover, most of the countries or regions we researched
are developed economies. This undoubtedly happened because the developed coun-
tries have mature systems of government regulation, as well as normalization market
rules. Those regulatory systems and market rules are crucial preconditions for any
PPP. In addition, those developed countries have all made a clear policy choice in
favour of using PPP. Some developing countries, such as China and India, have also

25

20
Number of articles

15

10

0
1983
1986
1987
1989
1990
1991
1994
1995
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

Year

Figure 2. Evolution of PPP articles over time.

 PUBLIC MANAGEMENT REVIEW 297

30

Number of articles 25

20

15

10

Country

Figure 3. Countries of analysis.

adopted PPP. Since 2014, China’s central government has been promoting the use of
PPP for the provision of necessary infrastructure.

Journals
All the analysed articles were published in PA- or Political Science-type journals (in
English). These articles were indexed by ISI Web of Science. The 186 articles which
we obtained were published in 56 different journals. Table 1 shows the journals that
have published at least two PPP articles in the past. The journal with the highest

Table 1. Analysed journals.

Journal No. of articles %
1 Public Money & Management 25 13.441
2 Public Performance & Management Review 14 7.527
3 Public Management Review 11 5.914
4 Local Government Studies 10 5.376
5 Public Administration Review 9 4.839
6 Public Administration 8 4.301
7 Canadian Public Administration 8 4.301
8 International Review of Administrative Sciences 8 4.301
9 Environment and Planning C: Government and Policy 8 4.301
10 Public Administration and Development 7 3.763
11 Australian Journal of Public Administration 5 2.688
12 Lex Local-Journal of Local Self-Government 5 2.688
13 Policy and Politics 5 2.688
14 International Public Management Journal 4 2.151
15 Policy and Society 4 2.151
16 Journal of Comparative Policy Analysis 3 1.613
17 Transylvanian Review of Administrative Sciences 3 1.613
18 Administration & Society 2 1.075
19 Policy Sciences 2 1.075
20 Policy Study 2 1.075
21 Studies in American Political Development 2 1.075
22 Social Policy Administration 2 1.075
Only journals that published at least two papers about PPP were selected.
298 H. WANG ET AL.

quantity of publications is ‘Public Money & Management,’ which has published

twenty-five papers relating to PPPs.

Cumulative citations per author

Figure 4 shows the cumulative citations per author. The cumulative citations per
author statistics could indicate the authors’ academic impact in the PPP field. On the
one hand, we found that Klijn (a professor at Erasmus University Rotterdam)
published the most papers in the PA- or Political Science-type journals. On the
other hand, we found that Hodge, a professor at Monash University, has published
three PPP-related papers, and his number of cumulative citations (262) is the highest.
Greve (a professor at Copenhagen Business School and coauthor with Hodge) also
has a high number of citations. In addition, Klijn, Koppenjan, Teisman, and
Edelenbos (all four of whom are professors at Erasmus University Rotterdam),
Bovaird (a professor at the University of Birmingham), Bloomfield (vice president
of the Clarus Group) and others also have high a cumulatively high number of
citations. Moreover, indications are that cooperation between authors significantly
increases both their academic output and impact. For example, Hodge and Greve,
and Klijn and Teisman cooperated with each other to publish several papers, and all
these academics’ papers have a high number of citations.

280
270 Hodge G A
260
250
240
230
220
210 Greve C
200
190
180
Cumulative citations

Klijn E H
170
160
150
140
130
120
110 Bovaird T Koppenjan J F M
100 Teisman G R
90 Edelenbos J
80 Bloomfield P
70 Campe S
Lonsdale C
60 Andonova L B Brinkerhoff D W King D & Heafey M Reeves E
50
Jones R &Noble G &BALL R
40 Kort M
Enserink B Ross T W Shaoul J
30 Marques R C
20 Hayllar M R
10 Petersen O H
0
0 1 2 3 4 5 6 7 8 9
Number of articles

Figure 4. Cumulative citations per author (top 20 authors).

 PUBLIC MANAGEMENT REVIEW 299

Resource Sustainability Spatial contagion

dependency 3% 3% Transaction cost
Stakeholder theory 3% theory
5% 14%
Organizational
sensemaking theory
3%
Principal-agent
Neo-institutionalist theory
3% 11%
Institutionalist
theory
8% Property rights
theory
5%
Regime and
coalition
perspectives New Public
5% Management
8%
Managerial,corporat
ist, pro-growth and
welfare Policy transfer
Public choice theory
5% 3% Network-orientated 3%
Governance perspective
8% 11%

Figure 5. Main theories used to study PPP.

Main theories used to study PPP in the journals of PA discipline

Figure 5 shows the main theories to study PPP in the journals of PA discipline.
Generally, there are three types of knowledge background to develop theoretical
models to discuss about PPP. Firstly, the PPP is analysed in an economics back-
ground. For instance, transaction costs theory concerns the optimal governance
structure of transactions. Property rights theory deals with the incompleteness of
PPP contracts. Principal–agent theory concerns the incentive problems caused by
information asymmetry between public and private parties. Secondly, the PPP is
analysed in a public management and policy background. For instance, network and
governance theories are used to study the cooperation between public and private
sectors. Public choice theory and New Public Management concern competition
mechanisms for the provision of infrastructure and public service. Thirdly, the PPP
is analysed in an organizational management background. For instance, stakeholder
theory concerns PPP needs to balance the benefits of stakeholders. Institutional
theory takes the PPP as an institution, and they argue that gaining institutional
legitimacy is as important as efficiency.

Main PPP issues in the journals of PA discipline

To provide an overview of the main issues addressed in the PA discipline publica-
tions, we use social network analysis (SNA) to display the co-occurrence of keywords.
Co-occurrence analysis assumes that some keywords co-occur in the same paper. The
300 H. WANG ET AL.

Figure 6. Network of main PPP issues.

high frequency of co-occurrence keywords means these keywords are given more
attention by scholars. Specifically, we analyse the keywords found in 186 papers, and
we constructed a co-occurrence matrix of these keywords.2 Then, we used UCINET
software to visualize the co-occurrence (see Figure 6). In Figure 6, the nodes in the
network are the keywords while the links show the relationships or flows between the
nodes. The numbers in the figure show the co-occurrence frequencies. SNA provides
both a visual and a mathematical analysis of keywords relationships. A visual analysis
has become a new trend to do the work of literature review, and the SNA is one of the
most popular tools (Ferrer, Thome, and Scavarda forthcoming). From Figure 6, we
confirm that PPP often co-occurs with keywords types of PPP(frequency = 16),
performance (e.g. value for money, benefits, cost, and public value) (frequency = 33),
risk (e.g. risk allocation, risk types, and risk sharing) (frequency = 25), drivers of PPP
(e.g. motivation of the adoption of PPP policies) (frequency = 15).3

Main findings
Defining the PPP concept: what does it look like?
Ideas and concepts do not suddenly emerge. It is necessary to look at an idea’s origin
before we reflect on the current main topics and discuss the potential future direction
of PPPs. The forerunner of the PPP was PFI. The PFI was initiated by Britain’s
Conservative government in 1992, at the height of the recession that followed the
property speculation bubble of the 1980s (Shaoul 2011). The recession’s origins were
associated with planning and urban development problems, where shortfalls in
finance were considered to be too great (Sedjari 2004). Although the Conservative
government had enough enthusiasm to develop the PFI policy, the initiatives were
slow to become popular for many reasons. For example, some people worried that the
public service ethos might be undermined by private sector involvement (Ball,
 PUBLIC MANAGEMENT REVIEW 301

Heafey, and King 2007). In 1997, however, the Labour government made the PFI
policy famous. At that time, the PFI ‘name’ was re-branded as PPP. At the same time,
the use of PPPs became a bipartisan policy. Then, other countries and governments
(e.g. the USA, European Commission, and several Asian countries), as well as
international organizations also argued for the greater use of PPP to provide badly
needed infrastructure, develop local economics, deliver public services, and renew
urban areas. Here, PPP refers to the various forms of cooperation between public and
private sectors, including design-build-finance-operate, build-own-operate-transfer,
build-operate-transfer, as well as PFIs and other forms of public–private cooperation.
In fact, PPP can be defined in various ways. PPP comes in several types and are
used in various ways and situations. Bringing the various definitions of PPP together
is not easy, but a body of common concepts and assumptions can be identified. We
constructed a co-occurrence matrix of the key PPP features in the 186 articles. Then,
we used the UCINET software to visualize and illustrate the co-occurrence (see
Figure 7). We have identified some key features as follows: firstly, PPP must be a
durable cooperation (frequency = 9). PPP project generally involves long-term
cooperation and a contractual relationship between public and private sectors of up
to 25 or 30 years (Girth 2014; Hodge and Greve 2007). A short-term contract is not
an actual PPP. The private sectors in PPP project normally participate in certain
phases of that project, including designing, building, operation, and maintenance.
These phases often involve large capital expenditure, typically hundreds of millions of
dollars or more (Newman and Perl 2014). Thus, a long-term contract permits both
partners to benefit from the cooperation (Silvestre and Araujo 2012). At the same
time, the long-term contract makes it possible for the private sectors to make a return
on their initial investment and indeed to make a profit. Secondly, PPP focuses on the
sharing of risks, costs, benefits, resources, and responsibilities (frequency = 9)
(Koppenjan 2005). Sharing is at the heart of any PPP partnership. PPP will not
transfer all the risks or costs to the private sector partners. Thirdly, PPP is often a

Figure 7. Key features of PPP concept.

302 H. WANG ET AL.

complex process (frequency = 6) (Ross and Yan 2015). Because of the long-term
nature of the contract and the requisite multi-phase cooperation (in terms of design,
build, operation, and maintenance), the goals of the PPP partners and the political
environment may be dynamic. These factors bring about a requirement for the
partners to negotiate and interact throughout the period of cooperation. This
makes the cooperation process in PPP project potentially complex. Additionally,
each of the PPP partners has its own strategy and institutionalized background.
This can make the decision-making process in PPP projects extremely complex
(Klijn and Teisman 2003). Finally, PPP projects have mutual goals (frequency = 3).
These mutual goals are what drive the public and private sectors to work together and
build a partnership.

Proposition One: PPP could be seen as a durable complex cooperation between

public and private sectors aiming to supply infrastructure and public service.
During the cooperation period, both public and private sectors should share their
risks and benefits to achieve their mutual goals.

Frequently, PPPs are associated with other government reforms, such as

privatization, outsourcing, and collaborative governance. The following concepts
should be distinguished: (1) PPP versus privatization. Privatization involves the
full or partial transfer of state-owned assets to the private sectors. Privatization
means that day-to-day production will be left to private operators, and the
government will act as the regulator. Privatization also includes such practices
as setting up concessions, franchises, leasing, and other practices. The differences
between PPP and privatization (e.g. concessions, franchises, and leasing) are
found in the nature and degree of the risk transfer. The degree of risk transfer
is very limited (with concessions and franchising) or even non-existent (leasing)
in privatization processes (Silvestre and Araujo 2012). There is nothing intrinsic
about privatization that requires partnerships (Forrer et al. 2010). (2) PPP versus
outsourcing. Outsourcing is one application of a make-buy policy. This involves a
temporary and singular principal–agent relationship, in which the relevant gov-
ernment departments make the decisions of what and how, and then the private
sectors ensure those things are done (Reynaers 2014). PPP, on the other hand, is
suited to a project that is so complex that the relevant government is not able to
unilaterally meet the objectives (Ham and Koppenjan 2001). Thus, outsourcing is
quite different from PPP. (3) PPP versus collaborative governance. PPP requires
collaboration to function, but PPP project’s most important goal is often to
achieve coordination, agreement, and joint production, rather than to achieve
decision-making consensus. Collective decision-making is therefore of secondary
importance in PPP. However, the institutionalization of a collective decision-
making process is central to the collaborative governance (Ansell and Gash
2008).

Proposition Two: PPP requires a lower degree of collective decision-making process

than collaborative governance, but higher than privatization or outsourcing.
 PUBLIC MANAGEMENT REVIEW 303

Risk management: how to deal with uncertainties?

Risk identification
A risk is seen as an uncertain possibility. Something going wrong can result in
increased costs or can cause delays (Johnston and Gudergan 2007). Normally, PPP
projects involve more types and higher degrees of risk than conventional public
procurement, privatization, and outsourcing projects. While PPP involves the pursuit
of multiple agreements, there is an inherent fragmentation in the pursuit of long-
term cooperation. Thus, this inherent fragmentation will create risks. In addition,
uncontrollable circumstances, the absence of market forces, inadequate expertise, and
the high cost of contract enforcement can also lead to additional risks (Bloomfield
2006). Both the public and private sectors must share accountability for these risks
(Boase 2000). To some extent, the technical–rational mix of PPP contract requires
both sides of the partnership to consider the possible risks from multiple angles. We
constructed a co-occurrence matrix of the PPP risks as described in the 186 studied
articles. We used the UCINET software to visualize the co-occurrence of PPP risks
(see Figure 8). In Figure 8, there are many kinds of risks, including construction risk
(frequency = 5), operation and maintenance risk (frequency = 4), financial risk
(frequency = 3), political risk (frequency = 3), policy risk (frequency = 2), project
risk (frequency = 2), demand risk (frequency = 2), and others. We classify these risks
as follows:

(1) Project perspective. These risks are generated by a project’s uncertainty and
complexity. The risks broadly cover five areas, namely (a) design and devel-
opment (e.g. design suitability), (b) construction (e.g. fixed time and cost to
complete), (c) finance (e.g. securing finance), (d) operation (e.g. service
performance), and (e) ownership (e.g. uninsurable loss or damage to assets)
(Hodge 2004). Among these five risks, the design and development risk is

Figure 8. PPP risk identification.

304 H. WANG ET AL.

borne by the public sector partner. The construction and finance risks are
borne by the private contractors. The remaining risks are essentially shared by
both the public and private partners.
(2) Market or social perspective. These risks are generated by the market’s (or
social) uncertainty and complexity. Due to the necessary public dimension,
PPP project often has a greater degree of visibility and hence more easily
becomes a target of social protest. This is why PPP has an element of social
risk (Ham and Koppenjan 2001). Also, due to the variability of customer
demand and preferences over time, a demand risk will also exist. If this risk
becomes a reality, the demand for the service will fall short of initial expecta-
tions (Athias 2013).
(3) Country perspective. These risks are generated by the PPP country’s uncer-
tainty and complexity (e.g. political or policy changes during concession
periods). These risks can also be called global risks. They include legal,
environmental, and political risks (Albalate et al. 2015). Because the invest-
ment in infrastructure can only be recovered on a long-term basis, private
investors are very sensitive to political risks (Koppenjan and Enserink
2009). As such, these global risks may be better managed by public sector
partners.

Ke, Wang, and Chan (2013) also classify risks into the three above-named
categories. However, Ke’s study further breaks down the risks into sixteen pro-
ject-level risks (e.g. private investor changes), seven market-level risks (e.g. market
demand changes), and fourteen country-level risks (e.g. corruption and interven-
tion of government). Other published studies also argue that PPPs have many
risks. These studies’ classification of risks can also be classified and grouped into
the three above-named risk categories. For instance, Ni (2012) believes transport-
oriented PPP is very complex, with legal risks, political risks, economic risks,
commercial risks, project risks, and partnership risks (risk of information
asymmetry).

Proposition Three: A PPP project may involve more risks than conventional public
procurement, and these risks are generated on the level of project, market, and
country.

Risk allocation strategies

Risk sharing is a key characteristic that distinguishes PPP from traditional procure-
ment projects, in which most of the risks reside with the public sector partners
(Reeves 2013). Both the public and private sectors are comprised of rational, eco-
nomic-minded people. As long as the risks outweigh the benefits, neither side will
enter into a partnership. However, if each partner can transfer some of the inherent
risks onto the other partner, thus sharing the risks, then a partnership can be built.
The goal of risk sharing is to encourage both sides to work closely together. Any
deviation from their common targets or commitments will ultimately penalize both
parties. Clearly, then, the transfer of risk can have an economic benefit. For instance,
Ball, Heafey, and King (2003) noted that risk transfer accounted for 60 per cent of the
total cost savings of PFI projects in the UK. Conversely, the allocation of risk must
 PUBLIC MANAGEMENT REVIEW 305

take into consideration the degree of risk affordability. Ke, Wang, and Chan (2013)
have shown that the misallocation of risks (by comparing the preferred and actual
allocation of risks) caused the failure of PPP projects in China. In addition, these risks
cannot be transferred to customers, as doing so would not be in the public interest
(Marques and Berg 2011). Therefore, effective risk transfer is seen as a critical
element in a successful PPP.
Albalate et al. (2015) examined the distribution of the various risks in motorway
concession PPP contracts in many countries (Spain, France, Chile, and Latin
American countries). Albalate concluded that construction risks should be trans-
ferred to the private partners, while how to allocate the other risks may depend on
factors such as macroeconomic and institutional stability, past experiences, and the
abiding regulation environment. Athias (2013) focused on the demand risk. This
study finds that there is a lower degree of matching with consumer preferences over
time when the public sector bears this risk. If the private sector does not have to
worry about demand risk, they have no real incentive to improve quality and thereby
increase the number of consumers. This finding suggests that the allocation of
demand risk is a function of and based upon the likelihood of customer preferences
changing.
From the above studies, we cannot identify all the risks. Nor can we identify all the
allocation risk strategies. The evidence, however, indicates that the risks (and the
transfer of those risks) may be affected by many factors, such as the type of project,
the market environment, and the institutions of the country.

Proposition Four: Risk sharing is a critical element for a successful PPP. Institutional
stability, regulation environment, and types of project will affect the allocation of
risks.

Drivers of using PPP: what gives rise to the adoption of PPP strategy?
The initiatives to use PPP are mainly those of lower associated costs, lower risks,
lower budget deficits, higher efficiency, and greater effectiveness and equity. PPP is
an effective way to provide much-needed and expensive infrastructure, public ser-
vices, and urban renewal, without increasing public sector borrowing (Willems and
Dooren 2016). These basic explanations provide a foundation for discovering the
drivers of PPP adoption. During more than 30 years of development, what other
factors have led to the innovation and diffusion of PPP adoption policies? Another
question is, why do some countries or regions prefer this policy? For instance, the
UK, Australia, Portugal, Spain, and the Netherlands have all experienced steady
growth in the number of signed PPP projects, while Scandinavian countries and
some central and eastern European countries have shown a far greater reluctance to
move towards the use of PPPs (Petersen 2010). Many cases and studies can answer
these questions. We constructed a co-occurrence matrix of the drivers of PPP
adoption, as listed in the 186 articles. We then used the UCINET software to visualize
these drivers (see Figure 9).
In Figure 9, the main drivers include risk transfer (frequency = 4), fiscal problems
(frequency = 5), earlier experience (frequency = 2), and cost reduction (frequency = 4).
As mentioned by Bovaird (2004), there have been several reasons behind the
306 H. WANG ET AL.

Figure 9. The drivers of PPP adoption.

adoption of PPP, and these reasons are often country-specific. For instance, in the
UK, Glaister (1999) listed several motives for PPP adoption. The motivations include
the transfer of risk, the advantage of using market tests of economic viability in place
of bureaucratic planning, the fact that is for the political authorities to meddle in
PPP, and the measurement of service quality by a public audit process. In the USA,
except for the fiscal pressures, Wang and Zhao (2014) showed that the probability of
using PPPs in highway tolling projects during the period from 1985 to 2010 was
significantly affected by factors such as traffic demands, liberal political ideology, state
PPP legislation, and earlier experiences of PPP adoption in the relevant state and
elsewhere. Current political conditions are also important for decisions to use PPPs.
Girth (2014) concluded that the US municipalities with higher degrees of political-
administrative autonomy are more likely to enter partnerships. Albalate et al. (2013)
also used the US water industry as an example. This study found that the risk of
recovering investment costs and the ratio of government wages to private sector wages
are positively related to private involvement. The former (risk of recovering invest-
ment costs) means that the higher possibility there is of private partners recovering
their costs, the greater the degree of private participation in the PPP will be (estimate
potential risk and investment returns). The latter (ratio of government wages to private
sector wages) means that the level of private sector participation will be higher when
the salaries in the public sector are higher than the salaries in the private sectors
(reduce costs). In Portugal, Simoes, Cavalho, and Marques (2013) examined the
existence of economies of scope in local public services (waste, water, and wastewater
treatment). This study found that economies of scope favour higher degrees of
aggregation of service (e.g. integration of design with project build, execution, and
maintenance), thus making the use of PPPs more favourable. In Canada, the wave of
PPP use from the 1990s onwards was mainly motivated by the evidence of being able
to build high-quality public infrastructure without adding to public debt. Another
motivation was that the administrative processes were not meeting policymakers’
 PUBLIC MANAGEMENT REVIEW 307

expectations (Siemiatycki 2015). However, in Denmark, a lack of regulations is seen as

the reason why PPP use has not gotten off the ground (Petersen 2010).
The above-named experiences were all in developed countries. We also made
some findings related to developing countries. For instance, Yang, Hou, and Wang
(2013) compared PPP development in four transition countries (China, Russia,
Poland, and Ukraine) and eight advanced economies (including the USA, UK, and
Germany). Advanced economies are more favourable in terms of providing institu-
tional guarantees and with regard to government credibility than are transition
countries. Zhang (2015) analysed the reasons why 333 Chinese cities (cities at
prefecture level and above) adopted PPP projects. The adoption of PPP projects in
the focal cities was affected by neighbouring cities’ adoption of PPPs, provincial
pressure, peer pressure, and expert influence. Besides China, Russia is also actively
pursuing PPP deployment in many sectors, mostly in transportation and urban
infrastructure projects. Many factors have contributed to the rapid expansion of
PPP use in Russia. Those factors include the government’s broad treatment of the
partnership meaning (PPP includes all types of collaboration between public and
private sectors), a lack of standards and consistency in PPP approval procedures,
excessive government financial support to partnerships, and several other factors
(Mouraviev and Kakabadse 2014). The nature of PPP in Russia departs from the
partnerships in western academic literature and government practices. This departure
may induce a greater risk of policy failure. Thus, the potential additional risk may
explain why scholars and practitioners in developing countries should spend more
time conducting theoretical research work on PPPs. The answers found in various
countries and sectors could have implications for some governments in their deter-
mination of whether or not to adopt the use of PPPs.

Proposition Five: The main reasons of adoption PPP in developed countries focus on
fiscal pressure, efficiency, and political environment. While, using PPP in developing
countries is mainly affected by higher-level government’s pressure, peer pressure, and
government’s broad treatment of PPP.

Performance and its influence factors: what are the outcomes of PPP?
PPP performance
Ultimately, both scholarly and practical interest in PPP is driven by whether or not
the adoption of PPP use will have a win–win balance between the public and private
sectors. However, evaluating PPP performance is not easy. One of the reasons for this
difficulty is that many actors are involved in PPP, and each actor may have a different
definition of success. However, our review of the preliminary literatures about
performance was interesting. Generally speaking, the performance of PPP can be
distinguished between a ‘narrow’ and ‘broad’ concept (Jeffares, Sullivan, and Bovaird
2013; Gestel et al. 2014). The narrow concept of PPP performance focuses on the
achievement of particular outcomes and targets as set out in the PPP agreement. The
main consideration centres around what level of return on the investment the PPP
has made. We know that PPP can encompass at least five families of arrangements,
including (1) institutional cooperation for joint production, (2) long-term infrastruc-
ture contracts, (3) public policy networks, (4) civil society and community
308 H. WANG ET AL.

development, and (5) urban renewal economic development (Hodge and Greve
2007). If PPP is all about the infrastructure design, build, finance, and operation/
maintenance (DBFO/DBFM), then the narrow concept refers to that project’s per-
formance. For instance, the construction period, construction quality, construction
cost, contract disputes, overall efficiency, and other factors can be used to test the
project’s performance (Ke, Wang, and Chan 2013). In addition, the internal rate of
return and net present value may also be used to measure project performance
(Vecchi, Hellowell, and Longo 2010).
The broad concept of PPP performance focuses on a wider range of contents and
scopes. This measurement of success takes into consideration the project’s wider
benefits for the partner organizations, citizens, and service users (beyond the project
or programme itself). ‘Value for Money (VfM)’ belongs to this ‘broad’ performance
assessment. VfM is seen as a prerequisite and pervasive rationale for establishing PPP
(Santandrea, Bailey, and Giorgino 2016). For instance, London City’s government has
said that proposed London underground PPP contracts will only go ahead if the
projects can show that they will provide superior VfM (Shaoul 2002). Normally, VfM
methodology will include cost and the availability of finance, risk allocation, time and
budget, flexibility, and so on. Although VfM provides a reasonable basis upon which
to assess performance, VfM can be a nebulous concept (Hodge and Greve 2010;
Reeves 2015). For instance, the inflexibility of a contract could be seen as a positive
factor, because demand changes are often a significant cause of cost overruns.
However, inflexibility is also a major constraint. PPP can be seen as a network for
governance and/or a governance scheme (Teisman and Klijn 2002; Farah and Rizvi
2007). Therefore, PPP performance should be viewed from the perspective of net-
work performance. For instance, some published studies consider two outcome
dimensions to evaluate PPP performance by using more than one criterion. These
two dimensions are content outcomes (focus on the final result, i.e. innovative
character and cost efficiency) and process outcomes (focus on the quality of the
decision-making processes, i.e. managerial effort and support of the stakeholders
involved) (Steijn, Klijn, and Edelenbos 2011). These outcome indicators include
stakeholder involvement and democratic anchorage, which have been emphasized
by the governance network theory. These distinctions are also in keeping with the fact
that PPP performance should be evaluated from an overall process perspective.

Proposition Six: PPP performance should be viewed as a network performance.

Focusing on the outcome indicators not only evaluates the PPP from a ‘technical’
point of view, such as cost, efficiency, but also assesses ‘governance’ questions, such
as engagement and accountability.

Factors for a successful PPP

Evaluating PPP performance is an important job for PPP initiators. A thorough
evaluation can help identify what should be noted in the implementation of PPP
(by policymakers and practitioners). Various arguments have been put forward about
why some PPP projects would be more effective than others. We constructed a co-
occurrence matrix of the factors for a successful PPP, as listed in the 186 studied
articles. We then used the UCINET software to visualize the co-occurrence of these
factors (see Figure 10). A large number of factors lead to a successful PPP, such as
 PUBLIC MANAGEMENT REVIEW 309

Figure 10. Factors for success.

contract management (frequency = 3), process management (frequency = 3), man-

agement strategies (frequency = 3), organizational forms (frequency = 3), and
political support (frequency = 2). We would delineate them as follows:
Some Netherlands scholars believed the arguments relating to what leads to a successful
PPP come from two theoretical perspectives. One perspective favours the organizational
forms that stem from the resource dependency theory and contract theory. The second
perspective favours management strategies that are rooted in the governance network
theory (Kort, Verweij, and Klijn 2016; Steijn, Klijn, and Edelenbos 2011). The organiza-
tional forms of PPP can be a spectrum ranging from strongly contractual arrangements
(e.g. standard contract and transactional/relational contracts) to informal arrangements,
such as loosely formed consortiums. This body of literature emphasizes competition and
monitoring. For instance, the important advantage of standard contracts is that they
encourage competition by enlarging the field of potential bidders and therefore lower
transaction costs (Van, Den. Hurk and Verhoest 2016). Management strategies focus on
process management (i.e. dialogue, negotiation, and leadership) and the strategies’ imple-
mentation during the collaboration period (Edelenbos and Klijn 2009). Which of the above
is more important for PPP performance? Steijn, Klijn, and Edelenbos (2011) argued that
network management strategies have a greater impact on the outcome of PPP, and that the
organizational form of the partnership has relatively little impact. Klijn and Koppenjan
(2016) also found that contract features (e.g. the contract’s flexibility, complexity, and
whether or not renegotiation is possible) do not necessarily secure good performance and
innovation. In other words, a good contract is probably a necessary or at least an important
condition of PPP, but not a sufficient condition to ensure PPP performance. However,
Kort, Verweij, and Klijn (2016) use the same data as Steijn, Klijn, and Edelenbos (2011),
but Kort et al. then use a different method to show that combinations of organizational
forms and network management strategies can produce a good PPP performance. This
result means that the relationships between organizational forms and management
310 H. WANG ET AL.

strategies may not be ‘either/or,’ but ‘and.’ For example, Murphy (2008) argues that the
success of PPP rests on three variables, namely (1) the nature of the project itself, (2) a
government that exercises effective project and contract management skills, and (3) clear
and effective risk allocation. Of these three variables, contract management and risk
allocation are required to design an effective organization form, and government exercise
is about process management.
In addition, other published studies also discuss how to create an effective PPP.
The suggestions include the following: developing local human resources to take on
management responsibilities (Mistarihi, Hutchings, and Shacklock 2013), taking on
the project management techniques (e.g. deciding upon, announcing, and defending
communication strategies) during periods when there was general community agree-
ment over the direction of the project plan (Roberts and Siemiatycki 2015), interac-
tion between the partners (Koppenjan 2005), maintaining political support for the
partnership (especially when there is a government leadership change) (Girth 2014;
Velotti, Botti, and Vesci 2012), encouraging public involvement and deliberation
(Boyer, Van, Slyke, and Rogers 2016; Chen, Hubbard, and Liao 2013), fair competi-
tion, the use of private skills and expertise (Silvestre and Araujo 2012), the use of
standardized tender documents and procurement procedures (Carpintero and
Siemiatycki 2015), setting fair public and private investment levels and using institu-
tional and operational knowledge (Bland and Overton 2016), and strong manage-
ment capacity (Andrews and Entwistle 2015).
The above findings represent the worldwide experience with PPP policy reforms
over the past number of decades. The effect of these experiences has been to reduce
the uncertainties and risks in PPP reforms going forward. However, it would be
wrong to think of the above as the best experiences that can simply be transplanted to
other countries and regions. The success of an experience depends on a specific
context, and this context will not automatically match other projects with different
sets of actors, preferences, and capabilities (Koppenjan and Enserink 2009). The role
of these findings is to offer an academic framework which explicitly demonstrates
PPP performance all around the world.

Proposition Seven: Various factors may affect PPP performance. It is necessary to

construct a comprehensive framework to show which factors may impact PPP
performance in given conditions.

Discussion and conclusion

In the discipline of PA, PPPs have already been discussed by many scholars. This
study contributes to the expansion of those PA researchers’ debates and viewpoints.
The systematic review of the past articles relating to PPP has given us the opportunity
to understand the state of the art and judge the research trends. Our review of 186
published papers was further synthesized and grouped into four major issues in PA
area. Those issues are: (1) PPP can be seen as a complex and durable cooperation
between public and private sectors. (2) Risks in PPP may originate from project level,
market level, and country level and should be allocated appropriately with full
consideration of institutional environment, regulation mechanisms, and project
types. (3) The enabling factors for the adoption of PPP in developed countries
 PUBLIC MANAGEMENT REVIEW 311

focus on fiscal pressure, efficiency, and political environment, while in developing

countries focus on a higher-level government’s pressure and a broad treatment of
PPP. (4) PPP performance should be seen as a network performance.
According to our results, we could discover that the topics, perspective, and
methodology of PPP research in PA discipline are different from other disciplines.
Firstly, the research topics in the PA discipline focus on the above four issues. While,
the Construction Management and Economics disciplines focus on investment envir-
onment, procurement, economics viability, financial package, and the boundaries of
organizations (Ke et al. 2009). Secondly, the studies of above four issues in the PA
discipline are more a kind of macro-level partnership perspective. This perspective
focuses on how to enable the cooperating agents build a partnership in order to
achieve public policy goals. While, other disciplines focus on the projects’ perfor-
mance and governance, which are a micro-level analysis. Thirdly, the studies of above
four issues in the PA discipline focus on empirical methodology. Some papers use
qualitative methods to do case studies, and some other papers use quantitative
methods to explore and test the relationship among variables. While, other disci-
plines use methodology of normative analysis or combining cases to study PPP.
The above issues could be further discussed in the PA discipline. PA concerns
about values, behaviour, and institution (Wright 2015). The discussion of these three
problems helps highlight PPP issues within PA discipline in the future.

● Value-how to evaluate PPP values. PPP can be seen as a network. The network
performance can stand for its values (e.g. cost, efficiency, equity, quality, and
satisfaction). Provan and Milward (1995) have proposed a preliminary and classic
theory of network effectiveness. Their network effectiveness is based on balancing
multiple stakeholder values (principals, agents, and clients). However, this network
effectiveness does not consider the value conflicts between different levels of
government. For example, a central government may care about whether PPP
projects help to achieve sustainability development, while local governments may
concern whether PPP projects relieve their financial burden and boost economic
growth. Thus, how to identify, understand, and resolve the network actors’ value
conflicts, and how to integrate the existing network effectiveness model and the
existing PPP performance method require careful consideration.
● Behaviour-how to establish actors’ behaviour principles to reduce the risk of coop-
eration failure. Existing behaviour research mainly focuses on motivation of using
PPP and PPP risk management strategies. However, the behaviour is variable. We
could not always be able to predict how an actor behaves. Thus, it is necessary to
establish universal principles of behaviour to help understand and predict how actors
under certain circumstances are often likely to behave (Wright 2015). For example,
how to construct a negotiation procedure during the cooperation process to reduce
conflicts, and how to establish a renegotiation principle to avoid opportunistic
behaviour.
● Institution-how to make PPP successful in transition economies in terms of
institutions. Western countries have mature institutions and practices relating
to PPP. Meanwhile, in some transition economies (e.g. Russian and Chinese),
PPPs are being promoted in many sectors. For example, PPP has become a very
popular term in China because the Chinese central government pushed the
adoption of PPPs in the delivery of infrastructure and public services since 2014.
312 H. WANG ET AL.

However, local governments in these developing countries do not have a

professional, independent, and fair legal environment. Specifically, how do
these formal institutions affect the adoption and success of PPP? Besides, the
informal institutions (e.g. culture and custom) may also have impact, so the
interaction of the formal and informal institutions should also be studied.

This study has provided a general overview of the PPP studies in the PA field, and
has formed a platform for PPP scholars to continue to build from. Understanding of
PPP in this field may enable PPP policymakers and practitioners to cooperate better.
Besides, lists of the journals and highly cited authors may be useful for practitioners
to read and consult.

Notes
1. http://www.cpppc.org/zh/pppjb/4167.jhtml
2. Some journals do not display keywords. Thus, we read their abstracts and full papers, and we
summarized the abstracts for them.
3. We have grouped some keywords into a single, larger classification. For example, ‘value for
money, benefit, and cost’ are all grouped into the classification of ‘performance.’

Disclosure statement
No potential conflict of interest was reported by the authors.

Funding
The research presented here was supported by National Natural Science Foundation of China (Grant
No. 71303028) and the Social Science Foundation of Liaoning Province, China (Grant No.
L16BGL013). We are thankful for their support.

Notes on contributors
Huanming Wang is an assistant professor in the Department of Public Administration at Dalian
University of Technology. His research interests are PPP, governance network, and privatization. His
research has been published in outlets such as Urban Policy and Research, Annals of Public and
Cooperative Economics, and Review of Managerial Sciences.

Wei Xiong is an assistant professor in the Department of Public Administration at Tongji University.
His current research interests are in the areas of public private partnerships, governance, and
sustainability.

Guangdong Wu is an associate professor in Department of Construction Management at Jiangxi

University of Finance and Economics. His research interests are PPP, conflict management, and
knowledge management. His research has been published in outlets such as Journal of Management
in Engineering, International Journal of Simulation Modelling, and Journal of Industrial Engineering
and Management.

Dajian Zhu is a professor in Department of Public Administration at Tongji University. His research
interests are sustainability, PPP, collaborative governance, and urban development. His research has
been published in outlets such as Journal of Cleaner Production, Land Use Policy, and Habitat
International.
 PUBLIC MANAGEMENT REVIEW 313

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