Private versus public finance in major programme management

Bent Flyvbjerg 

A main assumption behind privatisations, public-private partnerships and private finance initiatives in major programme delivery is that the involvement of private risk capital in programme delivery, for instance in infrastructure provision, will bring much-needed discipline to the planning and delivery of programmes. 

The research in this project is designed to test this assumption. So far the assumption has been tested only with small samples of programmes and the evidence is mixed. Statistically valid conclusions do not exist. This study will attempt to change this state of affairs. 

The primary research question is whether programme performance is significantly affected by type of financing regime, and especially whether private or public finance results in better performance in major programme management. Systematic and comparable data on major programme performance is notoriously hard to come by. This is the case for both public and private sector programmes, but including private programmes in data collection adds the further complication that performance data for such programmes are often considered business secrets. Data collection is therefore especially difficult and time consuming.

Methodologically, the research is based on statistical analyses combined with case studies. Theoretically, the study will contribute to theories of privatization and theories of where best to draw the borders between government and markets in major programme management.