The Governance of Public-Private Partnerships: Success and Failure in the Transportation Sector

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The Governance of Public-Private Partnerships: Success and Failure in the Transportation Sector The Governance of Public-Private Partnerships: Success and Failure in the Transportation Sector by Joshua Newman M.A. (Political Studies), Queen’s University, 2007 B.A. (Political Science), Concordia University, 2006 B.Eng. (Mechanical Engineering), McGill University, 2002 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in the Department of Political Science Faculty of Arts and Social Sciences © Joshua Newman 2013 SIMON FRASER UNIVERSITY Summer 2013 Approval Name: Joshua Newman Degree: Doctor of Philosophy (Political Science) Title of Thesis: The Governance of Public-Private Partnerships: Success and Failure in the Transportation Sector Examining Committee: Chair: Dr. David Laycock Graduate Chair, Department of Political Science Dr. Anthony Perl Senior Supervisor Professor Dr. Michael Howlett Supervisor Professor Dr. Patrick Smith Supervisor Professor Dr. Peter V. Hall Internal Examiner Associate Professor Urban Studies Program, SFU Dr. Evert Lindquist External Examiner Professor School of Public Administration University of Victoria Date Approved: May 22, 2013 ii Partial Copyright Licence iii Ethics Statement The author, whose name appears on the title page of this work, has obtained, for the research described in this work, either: a. human research ethics approval from the Simon Fraser University Office of Research Ethics, or b. advance approval of the animal care protocol from the University Animal Care Committee of Simon Fraser University; or has conducted the research c. as a co-investigator, collaborator or research assistant in a research project approved in advance, or d. as a member of a course approved in advance for minimal risk human research, by the Office of Research Ethics. A copy of the approval letter has been filed at the Theses Office of the University Library at the time of submission of this thesis or project. The original application for approval and letter of approval are filed with the relevant offices. Inquiries may be directed to those authorities. Simon Fraser University Library Burnaby, British Columbia, Canada update Spring 2010 Abstract Since the 1970s, the focus of public policy in many countries has been redirected from the public provision of goods and services to an emphasis on curbing government spending and limiting bureaucracy. This has led to a proliferation of alternative service delivery arrangements, in which the private sector is involved in public service delivery. The term “governance” is now commonly used to signify this shift away from the hierarchical mode of government that had been applied in the past. For many supporters of alternative service delivery, increased freedom for the private sector is regarded as the key to successful governance. Public-private partnerships (P3s) are a family of alternative service delivery mechanisms that allow the private sector to finance, own, and deliver goods and services to the public through long-term contracts. P3s fit comfortably into the logic of alternative service delivery, which implies that by removing some elements of the public sector and replacing them with some aspects of the private sector, a balance between accountability and efficiency can be struck. However, this presents an inherent conflict, as the public sector is viewed simultaneously as the problem and as the solution to improving public policy. This inherent conflict can sometimes lead to governance failure, a phenomenon that is not sufficiently understood. By examining two case studies in P3 delivery of transportation infrastructure, the Canada Line in Vancouver, Canada and the Sydney Airport Link in Sydney, Australia, the conditions for governance failure can be explained. These two cases have similar technical parameters and political motivations, but in the Canadian case, where the public sector fostered policy networks, demonstrated policy learning, and employed a collaborative institutional approach to project implementation, successful governance was achieved. By contrast, the Australian case, in which the government was not substantially engaged in the partnership, resulted in governance failure. From an analysis of these two cases I conclude that public sector policy leadership is essential to the prevention of governance failure. Keywords: Governance; public-private partnerships; transportation; policy networks; policy learning iv Acknowledgements While writing this dissertation, I was surrounded by many supportive people whose presence in my life I appreciate tremendously. My family, my friends, and Sothea all unhesitatingly provided love and encouragement when it was needed most. The Department of Political Science at Simon Fraser University has consistently supported my professional and personal development over the past few years. In particular, I wish to thank Mike Howlett, David Laycock, Andy Heard, Steve Weldon and Genevieve Fuji Johnson for their mentorship and advice. I would also like to thank Lynn Kool for the endless administrative support. Most importantly, thanks to Anthony Perl for guiding me along the way from my first day as a new graduate student to my dissertation defence. Anthony’s stellar supervision, guidance, advice, and general level of engagement was unparalleled and much appreciated. v Table of Contents Approval.............................................................................................................................ii Partial Copyright Licence.................................................................................................. iii Abstract.............................................................................................................................iv Acknowledgements............................................................................................................v Table of Contents..............................................................................................................vi List of Tables.................................................................................................................... vii List of Figures .................................................................................................................. vii List of Acronyms ............................................................................................................. viii Chapter 1. Introduction ............................................................................................... 1 Chapter 2. Public-Private Partnerships ................................................................... 24 Chapter 3. Governance Failure................................................................................. 44 Chapter 4. Case Studies............................................................................................ 88 Chapter 5. How to Avoid Governance Failures: Robust Policy Networks ......... 126 Chapter 6. How to Avoid Governance Failures: Making Use of Policy Learning ............................................................................................... 155 Chapter 7. How to Avoid Governance Failures: Collaborative Project Implementation.................................................................................... 179 Chapter 8. Conclusion............................................................................................. 200 References .................................................................................................................. 211 vi List of Tables Table 1. Excludability and Competitiveness of Goods and Services.............................. 26 Table 2. Capital Funding Contributions for Canada Line and Airport Link.................... 110 List of Figures Figure 1. Nested Policy Networks in British Columbia.................................................... 77 vii List of Acronyms BOOT Build-Own-Operate-Transfer CLCO Canada Line Company CLRT Canada Line Rapid Transit DBFO Design-Build-Finance-Operate GVRD Greater Vancouver Regional District GVTA Greater Vancouver Transportation Authority ICAC Independent Commission Against Corruption P3, Public-Private Partnership PPP PFI Private Finance Initiative RAV Richmond-Airport-Vancouver RAVCO Richmond-Airport-Vancouver Company viii Chapter 1. Introduction With the transition away from Keynesian economic management that occurred in the 1980s and 1990s, and with the rapid and easy transnational movement of capital and information that is often referred to as globalization, the modern democratic state finds itself in a world that is converging on a mode of governance that differs from the conventional methods of government that had been prevalent in Western democracies since the Great Depression. From one point of view, the government’s role has been changed from one of control to one of “steering” (Mayntz, 1993), in that hierarchical government with an independent and process-oriented bureaucracy has been, in many sectors, replaced by a system in which the formulation and implementation of public policy is decentralized and is often delegated in part or in whole to non-governmental actors. From this perspective, governance is about how “governments and non- government actors can democratically exert some influence, control and coordination” and effectively steer society (Pierre and Peters, 2000: 3). This includes the changing authority and roles of the state in the international sphere; the devolution and decentralization of authority within states (with a concurrent centralization of power in state executives);
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