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THE PRACTICE OF CONTRACTING IN PUBLIC PRIVATE PARTNERSHIPS: TRANSACTION COSTS AND RELATIONAL CONTRACTING IN THE IRISH SCHOOLS SECTOR
Author(s) -
REEVES EOIN
Publication year - 2008
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/j.1467-9299.2008.00743.x
Subject(s) - transaction cost , irish , corporate governance , incomplete contracts , database transaction , rationality , business , private sector , economics , contracting out , bounded rationality , public sector , public relations , finance , microeconomics , political science , law , operations management , economic growth , economy , linguistics , philosophy , computer science , programming language , incentive
This paper explores the practice of contracting in public private partnerships (PPP). Focusing on the first Irish PPP to provide secondary schools, it draws on perspectives from transaction cost economics and socio‐legal theory. It finds that the ex ante contractual setting was undermined by pushing forward with the PPP before conducting an adequate level of project appraisal. It explores the experiences of key stakeholders in the ex post contracting stage and concludes that the conduct of contracting practice was not characterized by the shift to relational contracting expected under PPP. Whereas this approach to contractual governance did not hinder the development of broadly trusting relations between the client and contractor, this was not manifest in terms of relations between the contractor and schools. A significant degree of conflict was evident in some schools‐contractor relations, something which can be attributed to sources of transaction costs, including incomplete information, bounded rationality and uncertainty.