What drives the employment of public-private partnerships in Kazakhstan and Russia: Value for money?

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Abstract

Public-private partnerships (PPPs) are employed in many countries as an alternative method of public service provision in which partners from the public and private sectors share their resources, responsibilities, and risks. Some well-justified factors that drive the partnership development are value for money and lack of budget funding. As PPP drivers may be unique, thepaper surveys the reasons for PPP expansion in two transitional countries, Kazakhstan and Russia. Based on detailed discussion of the commonly employed reasons for partnering (such as greater value for money, or lower total social cost associated with a PPP as opposed to contracting out a service), internal and external PPP drivers in Kazakhstan and Russia have been categorized and examined. Among internal drivers, the need to attract private initiative and funding for upgrading the utilities and housing infrastructure is most influential because of enormity of the task for which governments lack resources. The countries’ intention to align themselves with the requirements of perceived international best practices is yet additional influential driver of external nature. The paper concludes that public policy in the two countries is the major driving force for PPP development although the value for money concept and transaction cost economics appear to be neglected. The emerging PPP policy paradigm in Kazakhstan and Russia has facilitated PPP development in recent years, since 2005. However, lack of reliable solutions and instruments for PPP formation and implementation significantly slows down PPP expansion
Original languageEnglish
Pages (from-to)32-57
JournalOrganizations and Markets in Emerging Economies
Volume3
Issue number1(5)
Publication statusPublished - 2012
Externally publishedYes

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public-private partnership
Kazakhstan
public private partnership
Russia
driver
lack
funding
Public-private partnerships
Value for money
service provision
transaction cost
social costs
public service
resource
transaction costs
public sector
resources
private sector
best practice
budget

Cite this

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title = "What drives the employment of public-private partnerships in Kazakhstan and Russia: Value for money?",
abstract = "Public-private partnerships (PPPs) are employed in many countries as an alternative method of public service provision in which partners from the public and private sectors share their resources, responsibilities, and risks. Some well-justified factors that drive the partnership development are value for money and lack of budget funding. As PPP drivers may be unique, thepaper surveys the reasons for PPP expansion in two transitional countries, Kazakhstan and Russia. Based on detailed discussion of the commonly employed reasons for partnering (such as greater value for money, or lower total social cost associated with a PPP as opposed to contracting out a service), internal and external PPP drivers in Kazakhstan and Russia have been categorized and examined. Among internal drivers, the need to attract private initiative and funding for upgrading the utilities and housing infrastructure is most influential because of enormity of the task for which governments lack resources. The countries’ intention to align themselves with the requirements of perceived international best practices is yet additional influential driver of external nature. The paper concludes that public policy in the two countries is the major driving force for PPP development although the value for money concept and transaction cost economics appear to be neglected. The emerging PPP policy paradigm in Kazakhstan and Russia has facilitated PPP development in recent years, since 2005. However, lack of reliable solutions and instruments for PPP formation and implementation significantly slows down PPP expansion",
author = "Nikolai Mouraviev",
year = "2012",
language = "English",
volume = "3",
pages = "32--57",
journal = "Organizations and Markets in Emerging Economies",
issn = "2029-4581",
publisher = "Vilnius University",
number = "1(5)",

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N2 - Public-private partnerships (PPPs) are employed in many countries as an alternative method of public service provision in which partners from the public and private sectors share their resources, responsibilities, and risks. Some well-justified factors that drive the partnership development are value for money and lack of budget funding. As PPP drivers may be unique, thepaper surveys the reasons for PPP expansion in two transitional countries, Kazakhstan and Russia. Based on detailed discussion of the commonly employed reasons for partnering (such as greater value for money, or lower total social cost associated with a PPP as opposed to contracting out a service), internal and external PPP drivers in Kazakhstan and Russia have been categorized and examined. Among internal drivers, the need to attract private initiative and funding for upgrading the utilities and housing infrastructure is most influential because of enormity of the task for which governments lack resources. The countries’ intention to align themselves with the requirements of perceived international best practices is yet additional influential driver of external nature. The paper concludes that public policy in the two countries is the major driving force for PPP development although the value for money concept and transaction cost economics appear to be neglected. The emerging PPP policy paradigm in Kazakhstan and Russia has facilitated PPP development in recent years, since 2005. However, lack of reliable solutions and instruments for PPP formation and implementation significantly slows down PPP expansion

AB - Public-private partnerships (PPPs) are employed in many countries as an alternative method of public service provision in which partners from the public and private sectors share their resources, responsibilities, and risks. Some well-justified factors that drive the partnership development are value for money and lack of budget funding. As PPP drivers may be unique, thepaper surveys the reasons for PPP expansion in two transitional countries, Kazakhstan and Russia. Based on detailed discussion of the commonly employed reasons for partnering (such as greater value for money, or lower total social cost associated with a PPP as opposed to contracting out a service), internal and external PPP drivers in Kazakhstan and Russia have been categorized and examined. Among internal drivers, the need to attract private initiative and funding for upgrading the utilities and housing infrastructure is most influential because of enormity of the task for which governments lack resources. The countries’ intention to align themselves with the requirements of perceived international best practices is yet additional influential driver of external nature. The paper concludes that public policy in the two countries is the major driving force for PPP development although the value for money concept and transaction cost economics appear to be neglected. The emerging PPP policy paradigm in Kazakhstan and Russia has facilitated PPP development in recent years, since 2005. However, lack of reliable solutions and instruments for PPP formation and implementation significantly slows down PPP expansion

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