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Let’s realize the potential of PPPs  

Malcolm Morley's picture


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If the potential of public-private partnerships (PPPs) is to be realized, joint working within the public sector and between the public and private sectors needs to be improved. 

Experience across the world has consistently identified that organizations find it difficult to effectively work together both within and across sectors. Issues of organizational objectives and priorities, individual and organizational sovereignty, status, power, resources, and culture act as barriers. This too often means that the potential outputs and outcomes from PPPs are not maximized.

PPPs are often pursued as individual projects. Their effectiveness is consequently sub-optimal because they are not part of a larger PPP strategy. Unless PPPs are seen within a strategic, and not just financial, context, their impact is limited by a given project’s boundaries. Both public and private sector organizations need to understand the strategic context for PPPs from both the macro sector and micro organizational perspectives. 

This means that public sector organizations must understand the strategic context of the private sector and vice versa. Public and private sector organizations need to share objectives, understanding of key terms, as well as know the needs and demands of each other’s contexts. They need to illustrate a willingness to move from relationships that are transactional to ones that are collaborative—and then to true partnership.

Public to public sector partnerships

How can joint working within the public sector, within the private sector, and between the public and private sectors help to realize the potential of PPPs?

One approach is to build public to public partnerships, or P2PPs. Under this scenario, public sector organizations work together to determine the best way to identify and execute projects that deliver economic and social value. In relation to PPPs, public agencies collaborate among themselves to determine where private sector participation would further public sector objectives.

P2PPs are increasingly important for ensuring that public sector organizations work together to
  • achieve the desired outcomes
  • create PPPs within a strategic context that maximizes access to resources, competencies, capacity, and organizational capabilities within the public sector (before seeking to create PPPs with the private sector)
Where there is an asymmetry of power, access to resources, competencies, capacity, and organizational capability between public and private sector organizations—which can be caused by public sector organizations not working together within their organizations and within the larger sector—there is a danger that benefits that should flow from the relationship between the public and private sectors are not fully realized or equitably distributed.

Moving to true partnership

When creating relationships within and between sectors, it is vital that their structures and governance support true partnership. Failings in structure and governance too often create conflict and undermine performance. Similarly, a shared understanding of, and commitment to, the definition of success within the PPP is important, and performance should be evaluated in that context. We often see the definition of success vary among sectors. These differences can remain unspoken and inhibit the evolution of relationships.

Much more can be achieved from PPPs. Public and private sector organizations need to share objectives, develop trust and confidence, understand each other’s contexts, and move to work in true partnerships. This would put PPPs in a strategic context so that they have the structures, governance, and performance to deliver their potential.


Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.


Related posts:

Developing Public to Public Partnerships (P2Ps) that improve infrastructure’s social and economic value

PPPs need PALS

The staircase of relationships—and P2P partnerships
 

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