June 27, 2011
From Kenneth Davidson on PPPs for hospitals:
Under the national public-private partnership guidelines used by the Victorian government, a so-called "public sector comparator" is constructed to give a "truer" basis of comparison between public and private funding of projects. The key assumption in constructing any such comparator is the claim that the actual interest paid by the government underestimates the real cost of public financing. These costs include claimed inefficiencies inherent in government contracting - such as cost overruns. Other assumptions include the claimed ability of private partners to take over "risks" otherwise embedded in public ownership.Ah, so that's how it works. In order to demonstrate that public-private partnerships are more efficient than purely public operations it is first necessary to assume that public-private partnerships are more efficient than purely public operations.
Irrelevantly, you'll note I have preferred the reasonably accurate Latin translation of the original Greek in the title; only mavenistic idiots say "begs the question".