Improving Efficiency of Transportation Public-Private Partnerships with Foreign Partners

In recent years public private partnerships (PPPs) with foreign partners have become a popular procurement tool, albeit in many instances they did not prove successful. To identify some of the critical success factors, the author built an institutional and econometric model, basing on the incomplete contract theory. The research shows that the difference in effectiveness of PPPs with foreign and national participants is statistically insignificant. Yet what drives effectiveness up is a combination of demand-risk on the private-partner side and favorable business climate. Qualitative analysis also revealed the PPPs with foreign partners can be preferable in certain cases when their experience and proneness for political risks ensures their disciline. Findings of the research suggest potential ways of identifying projects that are most suited for PPPs with foreign and national partners as procurement methods, which was shown with the example of 4th part of Moscow Circular Road