Opportunism Of Private Actors In Public-Private Partnerships
Opportunism Of Private Actors In Public-Private Partnerships

Summary/Abstract: This paper deals with the issue of opportunism of private actors in Public-Private Partnerships (PPP). The problem of opportunism in the implementation of a PPP project stems from the fact that the parties’ relations are strained by the tension stemming from their conflicting interests. The organizational structure and the modus operandi of a public actor are aimed at accomplishing and promoting a general (public) interest. The aim of a private actor is to make a profit. This paper analyzes the reasons for the opportunism of a private actor in a public-private partnership, with emphasis on the “hold-up” problem imposed on the public actor. In particular, thehold-up problem is reflected in the fact that a public actor has to agree with the changes proposed in the PPP agreement by a private partner. This agreement is based on the fact that a public partner has no actual opportunity to protect the “initial agreement” contained in the original contract. The author proposes that the problem of opportunism shall be resolved ex ante by introducing relevant clauses in the PPP agreement. These clauses shall oblige the private partner to pay the price for their opportunistic behaviour. Therefore, the proposed methodology has a pre-emptive effect on the possible opportunism of a private actor.

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