Two Challenges of Public Private Partnerships

Two Challenges of public-private partnerships

Yogi Berra said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there”. In a complex and turbulent environment, public organizations and governments have adopted innovative dynamics to be more effective and create public value on a cost-effectiveness basis. One of the dynamic that public organizations have adopted is contracting public private partnerships. During the last years, there has being a worldwide growth in governments contracting services with private business. Since contracting services with private business seems to be an effective strategy, many organizations have engaged in this kind of partnership. However, public organizations and governments need to be careful when engaging in these partnerships. If these partnerships are not effectively managed, like Yogi Berra’s quote asserts, they won’t lead these organizations to anywhere.

Worldwide, scholars have held a debate around the public private partnerships. There are arguments that defend these partnerships and there are also many researchers who remain skeptical about the topic. However, researches of both positions have presented valuable reasons that support their thesis. For those reasons, this paper aims to demonstrate that when there is an effective oversight by public organization and an outcome based measurement system to evaluate the public private partnerships, it would be always effective.  

I.  Effective Oversight and Monitoring of Contracts by Public Organizations.

Public organizations and governments when decide to deliver services by means of public-private partnerships need to understand that they are the key players of these contracts. In the next paragraphs, three different approaches that highlight the importance of an effective leadership and management that foster an effective oversight to the public-private partnerships will be presented. Finally, evidence of an empiric study realized in Alabama will be briefly showed to support this thesis.

The role of governmental leaders and managers in public private partnerships is not just elaborating the clauses of the contract but also establishing a methodology to keep an effective oversight and monitoring in the ongoing process of the partnership. This means that the public-private partnership’s performance needs to be continuously supervised. Governments not only need to monitor and report the performance of the public private partnerships, but they must also evaluate these partnerships according to the fulfillment of outcomes.

Van, Seitanidi, Crane, and Brammer (2016) propose a Partnering Monitoring and Evaluation Framework that offers two dimensions that can be used as a tool for governments to effectively supervise the ongoing development of the cross-sector contract. The first dimension that this frame proposes is the establishment of a method for supervising the phases of the partnership from the beginning until the final impact. The second dimension of this frame also offers a system to assess the value created by the partnership to the community. In other words, it means monitoring from the beginning of the contract until the final outcome, and evaluation of the impact of the contract.