Public Private Partnerships: The Swiss Specificity

While most countries have adopted public private partnerships, the prevalence of such arrangements differs widely across countries and the differences have been persistent. In particular, while around 722 PPP projects have been launched in the United Kingdom between 1994 and 2016, Switzerland has experienced only 2 of such arrangements over the same period of time, and exhibits one of the lowest number of PPPs within European countries. What could explain this low number of PPPs in Switzerland? Is it a good or a bad thing? What is the right number of PPPs? The goal of this chapter is to answer these questions. To this aim, we first define precisely what PPPs are, and what they are not (Section 1). We then develop the theoretical framework that points out the conditions under which PPP arrangements are optimal, or relatively more optimal than the other possible modes of provision (Section 2). This normative analysis highlights that the choice to resort to PPPs should be driven by the characteristics of the public service considered. As we expect public services to be quite similar across countries of similar level of economic development, we can infer that only cultural and institutional differences that could help explain the differences in actually implemented PPPs. We then consider the bad reasons to resort and not to resort to PPPs that might differ across countries and we point out that, while there are probably too few PPPs in Switzerland, there are clearly too many of them in some other countries (Section 3). Finally, we conclude with some policy recommendations.