The governance of public-private partnerships: success and failure in the transportation sector

Since the 1970s, the focus of public policy in many countries has been redirected from the public provision of goods and services to an emphasis on curbing government spending and limiting bureaucracy. This has led to a proliferation of alternative service delivery arrangements, in which the private sector is involved in public service delivery. The term “governance” is now commonly used to signify this shift away from the hierarchical mode of government that had been applied in the past. For many supporters of alternative service delivery, increased freedom for the private sector is regarded as the key to successful governance. Public-private partnerships (P3s) are a family of alternative service delivery mechanisms that allow the private sector to finance, own, and deliver goods and services to the public through long-term contracts. P3s fit comfortably into the logic of alternative service delivery, which implies that by removing some elements of the public sector and replacing them with some aspects of the private sector, a balance between accountability and efficiency can be struck. However, this presents an inherent conflict, as the public sector is viewed simultaneously as the problem and as the solution to improving public policy. This inherent conflict can sometimes lead to governance failure, a phenomenon that is not sufficiently understood. By examining two case studies in P3 delivery of transportation infrastructure, the Canada Line in Vancouver, Canada and the Sydney Airport Link in Sydney, Australia, the conditions for governance failure can be explained. These two cases have similar technical parameters and political motivations, but in the Canadian case, where the public sector fostered policy networks, demonstrated policy learning, and employed a collaborative institutional approach to project implementation, successful governance was achieved. By contrast, the Australian case, in which the government was not substantially engaged in the partnership, resulted in governance failure. From an analysis of these two cases I conclude that public sector policy leadership is essential to the prevention of governance failure.