Project

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Fiscal decentralization and Public Private Partnerships: A means of improving efficiency in the delivery of public goods and services?

English title Fiscal decentralization and Public Private Partnerships: A means of improving efficiency in the delivery of public goods and services?
Applicant Athias Laure
Number 130459
Funding scheme Project funding
Research institution Swiss Graduate School of Public Administrati Faculty of Law, Criminal Justice and Public University of Lausanne
Institution of higher education University of Lausanne - LA
Main discipline Economics
Start/End 01.06.2011 - 30.09.2014
Approved amount 327'423.00
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Keywords (4)

Decentralization; Public Private Partnerships; Fiscal federalism; political agency

Lay Summary (English)

Lead
Lay summary
LeadDecentralization and Public Private Partnerships are closely related phenomena. They are traditionally considered separately in the economic analysis. We aim to shed light on the link and interplay between the two concepts, both on the theoretical and empirical levels.AbstractDecentralization and Public Private Partnerships (hereafter designated as PPPs) have generated keen interest in a number of countries including both developed and developing countries. The reasons behind the popularity of PPPs are, to some extent, closely related to those which generally justify the move towards decentralization in the public sector. Indeed both phenomena obey the same basic logic: Competition both within the public sector and on private markets is good per se as it leads to cost reductions and hence to efficiency improvements.However, the literature on fiscal federalism and on PPPs have, so far, ignored one another.Decentralization may however have a large impact on contractual arrangements, especially when considering the choice between in-house and private provision of public services. We thus propose theoretical and empirical analysis of the interactions between decentralization and PPPs.AimsThe aim of the project is to shed light on the link between decentralization and the organizational forms of public service delivery. In particular our objective is to bridge the gap between the literature on fiscal federalism and on PPPs by providing theoretical and empirical analysis of the interplay between political and institutional arrangements and the provision of public services. We wish to analyze how different forms of decentralization and the resulting fiscal arrangements between different tiers of governments impact the choice of PPPs at both the central and local level. The theoretical analysis proposed in the project consists of models of game theory with asymmetry of information. To check on the relevancy of the models that we will develop, we intend to collect data on public service provision and to rely on spatial econometrics methods.ContributionsDecisions and management of the provision of a public service are undertaken by political entities, whose incentives are shaped by political arrangements. This project intends to provide a new and comprehensive understanding of the interplay between decentralization and the choice between public versus private provision of public services. In addition to a new theoretical framework, we also provide policy makers with guidelines regarding the efficiency of PPPs in different institutional settings and on when and how PPPs should be used in a federation.
Direct link to Lay Summary Last update: 21.02.2013

Responsible applicant and co-applicants

Employees

Publications

Publication
Local Public-Services Provision under Public Private Partnerships: Contractual Design and Contracting Parties Incentives
Athias Laure (2013), Local Public-Services Provision under Public Private Partnerships: Contractual Design and Contracting Parties Incentives, in Local Government Studies, 39(3), 312-331.
Effects of Uncertainty and Opportunistic Renegotiations on Bidding Behaviour : Evidence from Toll Road Concessions
Athias Laure, Nunez Antonio, Effects of Uncertainty and Opportunistic Renegotiations on Bidding Behaviour : Evidence from Toll Road Concessions, in Florio Massimo, Picot Arnold (ed.), MIT Press, Cambridge.

Collaboration

Group / person Country
Types of collaboration
Cresuf, Unifr Switzerland (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
GATE, Lyon, France France (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
CRESE, Université de Franche-Comté France (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
DEEP, HEC Lausanne, Unil Switzerland (Europe)
- in-depth/constructive exchanges on approaches, methods or results
IDEP, USI Switzerland (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
Chaire EPPP, IAE Paris Sorbonne France (Europe)
- in-depth/constructive exchanges on approaches, methods or results
- Publication

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
Sinergia Workshop Talk given at a conference The Impact of Trust on Economic Organisation: Evidence from PPPs in OECD Countries 19.09.2014 Zurich, Switzerland Wicht Pascal;
9th Annual Congress of the European Economic Association (EEA) Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 25.08.2014 Toulouse, France Athias Laure;
70th Annual Congress of the International Institute of Public Finance (IIPF) Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 20.08.2014 Lugano, Switzerland Athias Laure;
Conference on “The Impact of Institutions and Regulation on Public Services”, University of Bristol Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 13.06.2014 Bristol, Great Britain and Northern Ireland Athias Laure;
Conference on “Auctions, competition, regulation, and public policy”, Lancaster University Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 12.06.2014 Lancaster, Great Britain and Northern Ireland Athias Laure;
16th INFER Annual Conference Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 28.05.2014 Pescara, Italy Athias Laure;
European School on New Institutional Economics Talk given at a conference Trust and Privatization: Evidence from PPPs in OECD Countries 19.05.2014 Cargèse, France Wicht Pascal;
"Reforming Public Service Delivery" international conference Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 15.05.2014 Lausanne, Switzerland Wicht Pascal;
Annual congress of the Swiss Society of Economics and Statistics Talk given at a conference Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 24.04.2014 Berne, Switzerland Wicht Pascal;
Invited research seminar in economics, KOF-ETH Zurich Individual talk Cultural Biases in Government Make-or-Buy Decisions: Evidence from a Regression Discontinuity Approach 30.09.2013 Zurich, ETHZ, Switzerland Athias Laure;
CESifo Venice Summer Institute - Workshop "The Economics of Infrastructure Provisioning: The (Changing) Role of the State“ Talk given at a conference Effects of Uncertainty and Opportunistic Renegotiations on Bidding Behaviour: Evidence from Toll Road Concessions 26.07.2013 Université Internationale de Venise, Italy Athias Laure;
International Conference "Contracts, Procurement, and Public-Private Arrangements" Talk given at a conference Public or Private?: Cultural versus Technical Factors 19.06.2013 Florence, Italy, Italy Athias Laure;
Public Economics At the Regional and Local level (PEARL) workshop Talk given at a conference Does decentralization foster the private provision of public services? Evidence from Public Private Partnerships in OECD countries 06.06.2013 University of Fribourg, Switzerland, Switzerland Athias Laure;
Invited seminar, Pareto Walras and DEEP. University of Lausanne Individual talk Public or Private?: Cultural versus Technical Factors 29.05.2013 University of Lausanne, Switzerland, Switzerland Athias Laure;
Invited seminar, EPPP chair, University of Paris 1 Individual talk Contracting for Government services: Does Culture Matter? 25.04.2013 University of Paris 1, Paris, France, France Wicht Pascal;
Doctoral seminar, IDHEAP Individual talk Local Public Policies: Contracting out, Equalization, and Tax Competition 22.04.2013 IDHEAP, Lausanne, Switzerland, Switzerland Wicht Pascal;
Invited seminar, Beta, University of Lorraine Individual talk Laboratory federalism: Policy learning and Electoral Incentives 14.12.2012 Nancy, France, France Schnyder Simon;
61ème Congrès de l'Association française de sciences économiques Talk given at a conference Term Limits and Political Budget Cycles: First Term or Last Term Effect? 02.07.2012 Paris, France Schnyder Simon;
Séminaire doctoral Pro-Doc Individual talk Contractualisation et décentralisation: vers l'efficience des services publics? 27.06.2012 IDHEAP, Lausanne, Suisse, Switzerland Wicht Pascal;
Séminaire de recherche du CES-ENS Cachan Individual talk Laboratory federalism: policy diffusion, learning and herding 07.06.2012 Cachan, France Schnyder Simon;
Conference on the Economics of Public-Private Partnerships Talk given at a conference Demand Risk Allocation in Public Private Partnerships: Who should hold up or be held up? 20.04.2012 IESE, Barcelona, Spain, Spain Athias Laure;
Séminaire de recherche du Laboratoire d'économie appliquée de Grenoble Individual talk Term Limits and Political Budget Cycles: First Term or Last Term Effect? 12.04.2012 Grenoble, France Schnyder Simon;
Invited Seminar in Economics, IDEP, USI Individual talk Demand risk allocation in Incomplete Contracts: The Case of Public Private Partnerships 03.04.2012 USI, Lugano, Switzerland, Switzerland Athias Laure;
ADRES Doctoral Conference Talk given at a conference Term Limits and Political Budget Cycles: First Term or Last Term Effect? 19.01.2012 Marseille, France, France Schnyder Simon;
5èmes Journées Economie et Espace Talk given at a conference Laboratory Federalism and Yardstick Competition 14.07.2011 GATE-Université de Lyon, France Schnyder Simon;


Self-organised

Title Date Place
Public Economics At the Regional and Local level (PEARL) workshop 06.06.2013 University of Fribourg, Switzerland, Switzerland
Public Economics At the Regional and Local level (PEARL) workshop 06.06.2012 Helsinki, Finlande, Finland

Knowledge transfer events

Active participation

Title Type of contribution Date Place Persons involved
La contractualisation de services dans le domaine de l'action sociale : une analyse économique 25.04.2014 Neuchatel, Switzerland Athias Laure;
Choix organisationnels en matière d'infrastructures sportives 31.01.2013 IDHEAP, Lausanne, Switzerland, Switzerland Athias Laure;
Choix organisationnels en matière d'infrastructures sportives 15.01.2013 IDHEAP, Lausanne, Switzerland, Switzerland Athias Laure;
International Transport Forum, OCDE 27.09.2012 Paris, France Athias Laure;
The fifth Bignami Lecture, IMD, Lausanne 02.02.2012 IMD, Lausanne, Switzerland, Switzerland Athias Laure;


Communication with the public

Communication Title Media Place Year
Talks/events/exhibitions La contractualisation de services dans le domaine de l'action sociale : une analyse économique Western Switzerland 2014
Media relations: print media, online media Les experts freinent les patrons La Liberté Western Switzerland 2014
Talks/events/exhibitions Choix organisationnels en matière d’infrastructures sportives Western Switzerland 2013
Talks/events/exhibitions Public Private Partnerships: A solution to the infrastructure crises? Western Switzerland 2012
Media relations: print media, online media Wider das Vorhaben von Economiesuisse Neue Zürcher Zeitung German-speaking Switzerland 2012
Media relations: print media, online media Partenariats Public-Privé: de quoi s'agit-il exactement? Média Planet Western Switzerland 2011

Awards

Title Year
Laure Athias est passée de Professeur Assistant à Professeur Associé (avec tenure), au sein de l'Université de Lausanne (IDHEAP). 2014

Abstract

Decentralization and Public Private Partnerships (hereafter designated as PPPs) have generated keen interest in a number of countries including both developed and developing countries. The reasons behind the popularity of PPPs are, to some extent, closely related to those which generally justify the move towards decentralization in the public sector. Indeed both phenomena obey the same basic logic: Competition both within the public sector and on private markets is good per se as it leads to cost reductions and hence to efficiency improvements. However, the literatures on fiscal federalism and on PPPs have, so far, ignored one another. Furthermore, decentralization may also have a large impact on contractual arrangements, especially when considering the choice between in-house and private provision of public services. In addition, this gap between the two strands of literature is all the more surprising given that the theoretical foundations in new fiscal federalism literature are in some extent close to theoretical roots in the PPP literature. The aim of our project is to shed light on two main topics regarding decentralization and the organizational forms of public service delivery. The first part of the project is an attempt to overcome some limitations of the tax competition literature and account for the possibility for firms to behave strategically and have heterogeneous risk preferences. The second part tries to bridge the gap between the literatures on fiscal federalism and on PPPs in order to analyze how different forms of decentralization and the resulting fiscal arrangements between different tiers of governments impact the choice of PPPs at both the central and local level. The methodology used in the two parts of the project is based primarily on game theory with asymmetry of information and the theory of auctions. The project also has a strong empirical dimension based on an extensive use of spatial econometrics with the goal of providing policy makers with guidelines regarding the effects of “tax wars” between local governments and the efficiency of PPPs in different institutional settings. This project provides us with the opportunity to strengthen the relationships between the Department of Economics at the University of Fribourg and the IDHEAP (University of Lausanne).
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