Monday, April 4, 2011

Why do people like me look askance at PPPs?

It's because the 'private' in PPP has the money and the political power to capture public policy.

A friend of mine wondered in her email to me last week as to “what those aided schools were if not PPPs (public-private partnerships) where the government provided funds for salaries and the missionaries ran the schools”.
"They were quite good too. Did any one criticise them or find fault with them?
So what is the difference between then and now?
Why are we so suspicious of PPPs? Why do we distrust the private sector?"
The following is my brief response to these questions.
Why does one have to go to aided Christian missionary schools for an example of PPPs? The PPPs are omnipresent and have been there as long as there has been anything resembling a government.
What is public if not made up of private entities?
Each one of us is private, but together we make up the public, the collective.
Every job contract of a government employee is nothing but a PPP because it's a contractual agreement between a private person and a public authority --- precisely conforming to the World Bank definition of a PPP.
A non-profit organisation partnering with government is also a PPP.
Most of all physical infrastructure ever built by governments across the world has been through PPP because public authorities contracted private parties to do the construction.
If you concede that a job contract of a government employee is a PPP, just replace the private individual with a company like Tata Consultancy Services (TCS).
Will the PPP have the same character now? Same kind of objectives and motivations?
Are the wealth, influence, political power of a corporation the same as that of an individual?
Are the wealth, influence, political power of a corporation the same as that of a small local NGO?
Will a PPP between Jan Swashthya Sahyog and Madhya Pradesh government have the character and intentions of a PPP between Pfizer and Madhya Pradesh government?
I don't think sensible people are obsessed with the concept behind a PPP.
What they worry about --- and rightly so, based on hard, empirical evidence accumulating across the globe --- is the ability of the powerful and the moneyed to make public policy and public resources serve their interests rather than the larger public interest.
(One may like to troll the Web for this empirical evidence. For instance, PPP projects hatched under UK's private finance initiative or PFI.)
Also keep in mind how prevailing political economy and moral standards influence the entire government behaviour, including PPPs and all public procurement and expenditure.
About India, it will be suffice to say that currently the entire government, both central and states', is a scam and fraud in itself because you just can't elect a government into office without the use of huge amounts of illegal money.
(That actually makes the entire government, the PM, chief ministers, ministers, every elected official illegal and liable to be prosecuted.)
So what will an illegitimately begotten government do if not loot the public exchequer?
Every investor needs returns on his investment. And public procurement and expenditure is one of the best ways to extract those returns.
The so called 'people with integrity' are largely a Media-assisted PR job and even when people in the government have a modicum of integrity, it's nothing more than a straw in the wind.

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