Contextual recipes for adopting private control and trust in public–private partnership governance
| Published date | 01 September 2023 |
| Author | Jinbo Song,Hongyan Liu,Yan Sun,Lingchuan Song |
| Date | 01 September 2023 |
| DOI | http://doi.org/10.1111/padm.12825 |
ORIGINAL ARTICLE
Contextual recipes for adopting private control
and trust in public–private partnership governance
Jinbo Song
1
| Hongyan Liu
1
| Yan Sun
2
| Lingchuan Song
1
1
School of Economics and Management,
Dalian University of Technology, Dalian,
Liaoning, China
2
Department of Public Administration, Dalian
University of Technology, Dalian, Liaoning,
China
Correspondence
Hongyan Liu, School of Economics and
Management, Dalian University of
Technology, No. 2 Linggong Road, Ganjingzi
District, Dalian, Liaoning 116024, China.
Email: dutlhy@qq.com
Funding information
National Natural Science Foundation of China,
Grant/Award Numbers: 71734001,
71672018, 71702020; Fundamental Research
Funds for the Central Universities of China,
Grant/Award Number: DUT20RW601;
National Key Research and Development
Project, Grant/Award Number:
2019YFD1101103; Major Program of
Philosophy and Social Science of Chinese
Ministry of Education, Grant/Award Number:
21JZD034; Liaoning BaiQianWan Talents
Program
Abstract
In governing public–private partnerships (PPPs), transferring
control rights to the private sectors and building trust
among partners are recognized as solutions to improve effi-
ciency and adaptability. However, what contexts would fit
into the adoption of these solutions remains unclear. Build-
ing on the relevant literature on project attributes and pro-
ject environments, this article divides the context into
several crucial factors: asset specificity, project publicness,
institutional completeness, market maturity, and regulatory
quality. A fuzzy set qualitative comparative analysis (fsQCA)
was conducted on 1378 PPP projects in developing coun-
tries to examine the contexts that support the outcomes of
private control and trust. Six causal paths created by a mix
of contextual conditions are found to be sufficient for the
outcomes, to which certain factors make unique contribu-
tions. Knowledge of these paths and context configurations
can help to match the context to the considered gover-
nance solutions, thereby contributing to successful PPP
governance.
在进行PPP治理设计时，将项目控制权转移到私人部门同时
在公私伙伴之间建立信任关系被认为能够实现效率和适应性
目标。然而，何种情境中才能采用这种治理安排尚不清楚。
本文基于项目属性和外部环境的相关文献，将PPP治理情境
划分为五种情境因素，包括资产专用性、项目公共化程度、
制度完备性、市场成熟度和监管质量。在此基础上，应用
fsQCA方法对发展中国家的1378个PPP项目进行了组态分
析，探讨了支持采用私人控制和信任的情境特征。研究发
现，由不同情境条件组合而成的六种路径能够支持采用私人
Received: 20 May 2021 Revised: 29 December 2021 Accepted: 4 January 2022
DOI: 10.1111/padm.12825
884 © 2022 John Wiley & Sons Ltd. Public Admin. 2023;101:884–901.wileyonlinelibrary.com/journal/padm
控制与信任。路径对比分析显示，资产专用性对路径形成具
有重要的支持作用，而高公共化程度会削弱这种支持作用；
高公共化程度条件往往需要“绑定”高监管质量条件；完善的
制度、市场和监管条件均不是必要条件，当某一种条件缺失
时，可以调整其他条件进而形成适合采用私人控制与信任的
情境。了解这些情境条件组合路径及各条件之间的作用关系
有助于将治理情境与所考虑的治理安排进行适应性匹配，从
而有助于达到成功的PPP治理。
1|INTRODUCTION
Public–private partnerships (PPPs) are advocated as well-established organizational arrangements in which public
and private partners jointly work to realize products and services and share the accompanying benefits, costs, and
risks (Hodge et al., 2010). With contracts of up to several decades, much attention has been given to determining
how to best govern partnerships after the ribbon is cut and the infrastructure is built (Forrer et al., 2010; Hodge
et al., 2017). However, the contextual contingencies related to project complexity and environmental uncertainty are
challenges that effective governance design still faces.
A wide stream of literature addresses the issue of the optimal governance solutions of PPPs. Following the
neoinstitutional economics paradigm, the importance of contract conditions, including well-written contracts, the
distribution of control rights and the allocation of risks, is acknowledged. These factors emphasize rational and
possibly opportunistic behavior and the need to control this behavior (e.g., Jensen & Meckling, 1976;
Williamson, 1991). Among them, the innovational distribution of control rights in relation to parties' motivation
for specific investment is regarded as the core element (Hart & Moore, 1990;Hoppe&Schmitz,2010). To main-
tain ex ante investment incentives, the private sector is supposed to control the design, build, finance, and mainte-
nance of projects (Warsen et al., 2019), which in turn h elps to avoid the hold- up problems caused b y large-scale
dedicated investments (Grossman & Hart, 1986). However, private control, which relies on rigid contracts, is sub-
ject to insufficient ex post adaptability of long-term contracts and potentially leads to conflicts (Gaski, 1984).
Given the embeddedness of economic behavior in the structure of social relations, trust relationshipsare thought
to help improve the actors' behavioral motivation and serve as a complement for formal contracts
(Granovetter, 1985; Reeves, 2008). In this way, by maintaining the incentive and adaptive intentions, a mixed for-
mula of private control in the contract aspects and trust in the relationship aspects is largely held as the “silver
bullet”for the PPP governance problem.
Nevertheless, private control and trust solutions will not be applicable and maintain their merits in all contexts.
Scholars have identified a variety of contextual factors affecting governance solutions, including project attributes
and environmental factors. Project transaction attributes, such as asset specificity, uncertainty, and transaction fre-
quency, are the main causes of transaction costs (Fleta-Asín et al., 2020; Wang et al., 2019). A project's public goods
attribute and its inevitable tension with commercial expectations, which affects the priority between the project
profit goal and public value in governance, have been mentioned in several studies (e.g., Besley & Ghatak, 2001;
Francesconi & Muthoo, 2011; Hodge et al., 2017). Moreover, environmental factors that alter the universal gover-
nance solution, notably the institutional framework, operating environment, and government sides, are also taken
into account (Yang et al., 2013). These factors are considered obstacles and facilitators of PPP development and its
good governance (e.g., Koppenjan & Enserink, 2009; Panayides et al., 2015) or as key factors that affect PPP perfor-
mance or the design of governance structures (e.g., Delhi & Mahalingam, 2020; Kort et al., 2016). Although these
studies provide important insights, neither perspective considers that the effects of contextual factors on
SONG ET AL. 885
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