Advertisement

Public-Private Partnerships and Prices: Evidence from Water Distribution in France

  • Eshien Chong
  • Freddy Huet
  • Stéphane SaussierEmail author
  • Faye Steiner
Article

Abstract

We use an original database of 5000 French local public authorities to explore the impact of organizational choice and performance as measured by consumer prices. In quantifying the impact of the choice of public-private partnerships (PPPs) on performance, we consider the related issue of the determinants of organizational choice. We estimate a switching regressions model to account for the endogeneity of organizational choice, and find that in our sample, (i) the choice by local public authorities to engage in a PPP is not random, and (ii) conditional on the choice of a PPP, consumer prices are significantly higher on average.

Keywords

Contractual Choices Public-Private Partnerships Public Services Transaction Costs Water supply 

JEL Codes

H0 H7 K00 L33 

References

  1. Athias, L. and S. Saussier (2005) ‘Contractual Design of Toll Adjustment Processes In Infrastructure Concession Contracts: What Matters?’, Working Paper ATOM-U. of Paris I Sorbonne.Google Scholar
  2. Bajari P., Tadelis S. (2001) ‘Incentives versus Transaction Costs: a Theory of Procurement Contracts’. RAND Journal of Economics, 32, 387–407CrossRefGoogle Scholar
  3. Bennett, J. and E. Iossa (2006) ‘Building and Managing Facilities for Public Services’, Journal of Public Economics, Forthcoming.Google Scholar
  4. Boyco M., Shleifer A., Vishny R. (1996) ‘A Theory of Privatization’. Econ. J., 106, 309–319CrossRefGoogle Scholar
  5. Cour des Comptes (1997) La gestion des services publics locaux d’eau et d’assainissement, Rapport Public, Paris, Editions du Journal Officiel.Google Scholar
  6. Cour des Comptes (2003) La gestion des services publics d’eau et d’assainissement, Rapport Public, http://www.ccomptes.fr/Cour-des-comptes/publications/rapports/cdc55.htmGoogle Scholar
  7. Demsetz H. (1968) ‘Why Regulate Utilities?’. Journal of Law and Economics, 11, 55–66CrossRefGoogle Scholar
  8. Desrieux, C. (2005) ‘Revisiting Relational Contracting in Public Private Partnerships : A Comparison of French and American Local Public Services’ Working Paper ATOM-U. of Paris I Sorbonne.Google Scholar
  9. Goldberg V.P. (1976) ‘Regulation and Administered Contracts’. Bell Journal of Economics, 7, 426–448CrossRefGoogle Scholar
  10. Guérin-Schneider L., Breuil L., Bonnet Fr. (2003) ‘Dix ans de loi Sapin dans les services d’eau et d’assainissement: évolutions et perspectives du modèle de délégation à la française’. Responsabilité et Environnement, 31, 44–57Google Scholar
  11. Hart O.D. (2003) ‘Incomplete Contract and Public Ownership: Remarks, and an Application to Public–Private Partnerships’. Economic Journal, 113, 69–76CrossRefGoogle Scholar
  12. Hart O.D., Shleifer A., Vishny R.W. (1997) ‘The Proper Scope of Government: Theory and Application to Prisons’. Quarterly Journal of Economics, CXII, 1127–1162CrossRefGoogle Scholar
  13. Huet F., Saussier S. (2003) ‘The Provision of Public Interest Services through Private Law Contracts’. European Business Organization Law Review, 4, 403–428CrossRefGoogle Scholar
  14. Littlechild S.C. (2002) ‘Competitive Bidding for a Long-Term Electricity Distribution Contract’. Review of Network Economics, 1, 1–38CrossRefGoogle Scholar
  15. Ménard C., Saussier S. (2002) ‘Contractual Choices and Performances: The Case of Water distribution in France’, in Economics of Contracts: Theories and Applications. Cambridge University Press, pp. 440–463.Google Scholar
  16. Ménard C., Saussier S. (2003) ‘La délégation de service public comme mode organisationnel efficace de la distribution d’eau en France: Théories et évidences empiriques’. Economie Publique, 12, 99–129Google Scholar
  17. Vickers J., Yarrow G. (1991) ‘Economic Perspectives on Privatization’. Journal of Economic Perspectires, 5, 111–132Google Scholar
  18. Vining A.R., Boardman A.E. (1992) ‘Ownership versus Competition: Efficiency in Public Entreprise’. Public Choice, 73, 205–239CrossRefGoogle Scholar
  19. Williamson O.E. (1976) ‘Franchise Bidding for Natural Monopolies – In General and with Respect to CATV’. Bell Journal of Economics, 7, 73–104CrossRefGoogle Scholar
  20. Williamson O.E. (1999) ‘Public and Private Bureaucracies: A Transaction Cost Economics Perspective’. Journal of Law Economics and Organization, 15, 306–342CrossRefGoogle Scholar
  21. Zupan M.A. (1989a) ‘Cable Franchise Renewals : Do Incumbent Firms Behave Opportunistically?’. RAND Journal of Economics, 20, 473–482CrossRefGoogle Scholar
  22. Zupan M.A. (1989b) ‘The Efficacy of Franchise Bidding Schemes in the Case of Cable Television: Some Systematic Evidence’. Journal of Law and Economics, 32, 401–456CrossRefGoogle Scholar

Copyright information

© Springer 2006

Authors and Affiliations

  • Eshien Chong
    • 1
  • Freddy Huet
    • 2
  • Stéphane Saussier
    • 3
    Email author
  • Faye Steiner
    • 4
  1. 1.ADIS GRJM– University of Paris XI Sceaux, France & ATOM – University of Paris I SorbonneParisFrance
  2. 2.CERESUR – University of La Réunion, Paris, France & ATOM – University of Paris I SorbonneParisFrance
  3. 3.ADIS GRJM– University of Paris XI Sceaux, France & ATOM – University of Paris I SorbonneParisFrance
  4. 4.CES TEAM – University of Paris I SorbonneParis CedexFrance

Personalised recommendations