Public-private partnerships and investments in innovation : the influence of the contractual arrangement
Construction management and economics, 2014, Vol. 32, No. 4, pp. 349-361[Florence School of Regulation], [Water]
ROUMBOUTSOS, Athena, SAUSSIER, Stéphane, Public-private partnerships and investments in innovation : the influence of the contractual arrangement, Construction management and economics, 2014, Vol. 32, No. 4, pp. 349-361[Florence School of Regulation], [Water] - https://hdl.handle.net/1814/39507
Retrieved from Cadmus, EUI Research Repository
Public-private partnership (PPP) policy strategies emphasize the ability of PPPs to foster innovation. Evidence reported in literature supports less the inherent quality of PPPs for innovation and more the importance of contributing factors. The contractual agreement is the setting of these factors. In this context, an analytical model based on behavioural economics is presented, with boundary conditions reflecting various contractual configurations. The analysis indicates why, from a purely economic point of view, the private party in a PPP arrangement has an incentive to invest in low risk incremental innovations, which impact on, and positively effect, cost savings during construction and operation. It is also identified that further innovations are hampered by the ability to produce verifiable improvements correlated to performance. Findings contribute to the subject of public procurement for innovation in PPPs and support public authorities regarding the rationale, potential and necessary framework conditions for the use of public procurement as an innovation policy tool.
Cadmus permanent link: https://hdl.handle.net/1814/39507
Full-text via DOI: 10.1080/01446193.2014.895849
ISSN: 0144-6193; 1466-433X
Series/Number: [Florence School of Regulation]; [Water]
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