"The optimality of public–private partnerships under financial and fiscal constraints"

Authors:
Marco Buso - Department of Economics and Management, University of Padua
Luciano Greco - Department of Economics and Management, University of Padua

Government tasks can be delegated to the same or different agents. Agents have financial constraints, and the government's contractual capacity is limited. Partnership contracts, with history-dependent incentives, are better at addressing moral hazard than sequential contracts. Partnership contracts are preferred unless bundling tasks harms the agent financially. This study, published in the Journal of Economics and Management Strategy, highlights the importance of firms' financial and government's fiscal conditions in analyzing public-private partnerships.

Read the full article here