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Public Private Partnerships and Sustainability

Updated: May 9




Sustainability is a critically important concept in governance and private sector environments. It is particularly relevant in economic, ecological, and social fields and is, from a global perspective, a salient issue of contemporary debate. Sustainability is a topic of great interest in modern society, premised on satisfying the needs of the present generation without compromising the ability of future generations to fulfill their needs.


The three dimensions of sustainability are interrelated: economic, ecological, and social, and they facilitate social equity, justice, and economic prosperity in a clean, natural environment. PPPs have become important as government priorities change, with limited resources, political shifts, and social welfare regarding equity and justice. Nonetheless, conflict can develop between private commercial interests and the long-term sustainability objectives of the government. Hence, the research on the effectiveness of PPPs as related to ecological, social, and economic goals and sustainability needed to be more conclusive. However, in the intense and salient debate over economic, social, and ecological goals of the public and private sector's evaluation of sustainability as a performance measure of collaborative governance it was essential to determine if PPPs deliver their implicit sustainability objectives. The groundbreaking report Our Common Future (Brundtland, 1987) highlighted the strong interdependence in contemporary social, ecological, and economic challenges. The very survival of humankind, i.e., the air we breathe, the water we drink, and natural resources, all hinge on sustainable environmental actions on a global scale.


The Brundtland report (1987) states that there must be a novel approach to economic development that meets immense human needs and consumption while staying within the boundaries of environmental limitations. There are three interrelated subsystems of sustainability: social, economic, and ecological. The characteristics of the three subsystems of sustainability in terms of economics and market system relate to material well-being. The social system is a political and cultural structure, and ecological systems are related to the biosphere and environments and the protection of human existence. A political process manages and balances these subsystems.


PPPs contribute to sustainable development concerning UN's17 sustainable goals. The study looked at PPPs in infrastructure (goal 9: industry, innovation, infrastructure), especially transportation and education (goal 4: quality education).

Table 1 lists the 2030 agenda for sustainable goals of the UN 17.


Table 1 Agenda 2030 Sustainability Goals


1 No Poverty End poverty in all its forms everywhere

2 Zero hunger end hunger, achieve food security, improve nutrition, and promote sustainable agriculture

3 Good health and well-being Ensure healthy lives and promote well-being for all at all ages

4 Quality education Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

5 Gender equality Achieve gender equality and empower all women and girls

6 Clean water and sanitation Ensure access to water and sanitation for all

7 Affordable clean energy Ensure access to affordable, dependable, sustainable, and modern energy for all

8 Decent work and economic growth Promote inclusive, sustainable economic growth, employment, and decent work for all

9 Industrial innovation infrastructure, build resilient infrastructure, promote sustainable industrialization, and foster innovation

10 Reduce inequalities in and among countries 11 Sustainable cities and communities, Make cities inclusive, safe, resilient, and sustainable

12 Responsible consumption production, Ensuring sustainable consumption and production patterns

13 Climate action Take urgent action to combat climate change and its impact

14 Life below water Conserve and sustainable use of the ocean, seas, and marine resources

15 Life and land sustainability Manage Forest, combat desertification, halt and reverse land degradation, halt biodiversity loss

16 Peace, justice, and strong institutions Promote peaceful and inclusive societies

17 Partnership in the goals Revitalizes the global partnership for sustainable development. Note. PPPs contribute to sustainable development concerning UN's17 sustainable goals. The study looked at PPPs in infrastructure (goal 9: industry, innovation, infrastructure), especially transportation and education (goal 4: quality education).

Note. Table three the 2030 agenda for sustainable goals of the UN 17.


Implementation of sustainability goals often discussed globally, occurs at national and local levels in respective governments. PPPs represented a strategically vital approach and tool for increased sustainable development, as per the World Summit in Johannesburg in 2002 (United Nations) and upheld as crucial for sustainable public service provisioning. It must start with a comprehensive approach to evaluate PPP's contributions to sustainability goals. Scholars argue that PPPs are promising tools only when they improve sustainability's social and environmental dimensions.


When viewed holistically, PPPs are thriving, including economic and financial sustainability evaluation. The financial performance of PPPs for the public stakeholder has not done as well; overinflated profits, no public ROI, and the VfM often does not materialize. The questions of sustainability in economic terms were central to underperforming PPPs, and the question of sustainable PPPs contribute to sustainable development concerning UN's17 sustainable goals. Moreover, in the public sector, sustainability is increasingly relevant to meeting social, economic, and environmental objectives of inter-and intra-generation justice. The public manager's role impacts lives, from education to environmental services and plans for social welfare. Governance must embrace and take a leadership role in managing sustainability challenges. Sustainability efforts must go deeper than results and must be a central guideline for public sector decision-making and actions, subject to active management. Even with projects in the standard procurement process or through PPPs, the traditional sustainability objectives go through government regulation. Global initiatives often impose regulation for ecological and social issues, disseminating country-specific complex legislation and soft (directives and guidelines) to change corporate behavior.


Successful PPPs enhance sustainability's social, economic, and ecological dimensions because PPPs offer social, economic, and ecological improvements. However, there sometimes is tension between private actors' market interest and the long-term sustainability objectives of the government, which brings into question the effectiveness of PPPs and sustainability. Additionally, cost savings from PPPs improve long-term sustainability and ensure public service provisioning for future generations. Research on PPPs and sustainability, primarily implicit descriptions focused on impact, showed a positive contribution to goal achievement. Improved cost with PPPs improves the efficiency of public service delivery. PPPs enhance economic sustainability dimensions, improve ecological sustainability in the fishery sector, and strengthen social sustainability by fostering accountability in public service delivery. Conversely, Carpintero and Petersen (2014) research highlighted successful PPP projects on economic dimensions but pointed out that they failed regarding financial sustainability, as they needed to improve competition, transfer risk to private sector partners, or increase cost-effectiveness. There are even more mixed results on PPPs and financial sustainability. Hurst and Reeves (2004) postulated that PPPs potentially improved the allocation of risks across partners, but this risk diffusion increases overall project cost. Studies show that PPPs need to deliver promised contributions to sustainability-related objectives. Pinz et al. (2018) structure and governance analysis showed that risk allocation, the definition of responsibilities continuously in the partnership process, and the choice of proper governance and financing structure are vital for effective PPP management. According to Ameyaw and Chan (2015), risk allocation is according to the capacity of both the public and private partners.


Finally, another success factor is appropriate minimum revenue guarantees to build stronger partnerships because they balance the private actor's profit goals with the public administration's budgetary and public welfare interests. Based on the literature review by Pinz et al. (2018), rarely are sustainability issues addressed explicitly in PPPs management research. Scholars' analysis of PPPs in policy fields is critical to achieving sustainable development goals in Agenda 2030. We need to include sustainability in scholarly discussions on PPPs. If they include sustainability, it is usually implicit, such as how well PPPs achieved objectives that support a sustainable dimension. Since no comprehensive approach to sustainability exists, few conclusions on trade-offs and links between different sustainability dimensions materialize.


Research literature focused on sustainability as an outcome variable and did not show sustainability orientation during the PPP management process. As such, applying a comprehensive approach to sustainability would provide a suitable process to research, as per the Brundtland report. The United Nations has pursued sustainability goals for more than thirty-six years. Since then, the World Commission on Environment and Development (WCED) 1987 and the UN have pursued sustainable development for its member countries to fulfill its sustainability goals, known as the Brundtland report. The central vision of the UN is to make development sustainable to ensure that it meets the needs of the present without compromising future generations (WCED 1987, p. 17), viewed as intergeneration justice.


Note. This article is repurposed from Chapter three of the Research study: Public Private Partnerships in Infrastructure: A Study on Performance and Equity Improvement. Written by Dr. Carl E. Harris Sr.


References


Hajian, M., & Jangchi Kashani, S. (2021). 1 - evolution of the concept of sustainability. from brundtland report to sustainable development goals. Elsevier Inc. doi:10.1016/B978-0-12- 824342-8.00018-3


Pinz, A., Roudyani, N., & Thaler, J. (2018a). Public-private partnerships as instruments to achieve sustainability-related objectives: The state of the art and a research agenda. Public Management Review, 20(1), 1-22. doi:10.1080/14719037.2017.1293143


Pinz, A., Roudyani, N., & Thaler, J. (2018b). Public-private partnerships as instruments to achieve sustainability-related objectives: The state of the art and a research agenda. Public Management Review, 20(1), 1-22. doi:10.1080/14719037.2017.1293143


Spraul, K., & Thaler, J. (2020). Partnering for good? an analysis of how to achieve sustainability-related outcomes in public–private partnerships. Business Research, 13(2), 485-511. doi:10.1007/s40685-019-0097-3





Dr. Carl E. Harris, Sr.

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