Between Commonweal and Competition

Abstract

The authors leverage insights and theories from the extensive interfirm (business-to-business, or B2B) alliance literature to explore the effect of the sectors of the partners on the governance of infrastructure public–private partnerships (PPPs) as compared with B2B alliances. Their analysis suggests that the sectors of the partners have an important impact on PPP governance, not only because the sector constrains the availability of some governance mechanisms but also because it makes alternative mechanisms available or relevant to the partners. Specifically, the authors predict that PPPs will avoid equity structures and will rely, instead, on less complete and more complex alliance contracts; a restricted scope of activities; and nonequity hostages, such as metagovernance mechanisms or stakeholder involvement. Contrasting with B2B alliances, their analysis also suggests that trust-based governance mechanisms will play a minimal role in the governance of PPPs.