Effects of the institutional environment on public-private partnership (P3) projects: Evidence from Canada

Michael Opara, Fathi Elloumi, Oliver Okafor, Hussein Warsame

Research output: Contribution to journalJournal Articlepeer-review

46 Citations (Scopus)

Abstract

The purpose of this paper is to understand the effects of the institutional environment on project outcomes in order to contribute to the accumulating accounting literature on P3s. Based on an empirical study of Alberta's institutional environment, using Edmonton's Anthony Henday Highway P3 projects, we analyze how the: a) political environment enables or disenables P3 outcomes; b) policy/business environment impacts project development and implementation; and c) organizational capacity affects P3 outcomes and vice versa. Adopting a neo-institutionalism perspective and a case study approach, we investigate the effects of the institutional environment on P3 project outcomes. This research is based on 35 semi-structured interviews of public sector executive managers, political actors, senior industry executives, project consultants/advisors, labour union, media specialists, community advocates and public policy analysts in the P3 industry who participated in Alberta's P3 projects from 2004 to 2016. We find that the institutional environment has significant influence on project performance, and program permanence/continuity. Our study suggests that P3 enabling environments present: 1) relevant P3 policy measures and committed political support by field actors; 2) a path-dependent response to project outcomes; and 3) institutional environment elements that are mutually re-enforcing with synergistic effects. In effect, we document that a strong political leadership support for P3s, a favourable policy environment, and effective organizational capacity are pre-requisite factors for the successful implementation of P3s. Given the unsettled debate about various methodological approaches to value for money (VfM) determination for assessing P3s, we are unsure whether our findings are partly influenced by inconsistent accounting standards for P3s across jurisdictions. Our study highlights critical P3 enabling attributes that would be beneficial to accounting researchers interested in institutional environment studies and co-operative arrangements, accountants, public sector policy managers, regulators, and private sector partners saddled with the task of developing and implementing P3 projects in various institutional and/or contextual settings.

Original languageEnglish
Pages (from-to)77-95
Number of pages19
JournalAccounting Forum
Volume41
Issue number2
DOIs
Publication statusPublished - Jun. 2017

Keywords

  • Accounting treatment for P3s
  • Alberta P3
  • Institutional environment
  • Public private partnerships
  • Value for money

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