Public private partnerships in Alberta's transportation infrastructure: A study of the evolution of the institutional environment

Abstract

Governments are increasingly turning to public private partnerships (P3s) to develop and deliver long-term infrastructure and services. Thus, the procurement of major capital projects as P3s is growing. The institutional environment for P3s influences project performance, program permanence and continuity. Institutional deficiencies can mean project failure, especially when political legitimacy, organizational capacity and partnership building arenas are lacking; conflict is rampant and a satisfactory conflict resolution mechanism is non-existent or does not work well as a formal structural feature of the institutional environment. Given that different institutional environments leads to different outcomes, this research analyzed the Alberta institutional environment using Edmonton’s Anthony Henday Highway. Adopting a longitudinal case study methodology, this study traced the emergence of P3s in Alberta, examined the institutional environment beginning with the pre-existing institutional settings, and analyzed the impact of the institutional environment on P3 projects between 2002 and 2012. The key findings are: a) P3s emerged due to a convergence of dissatisfaction with the existing model, the storm of fiscal pressures the government faced and political support for the introduction of P3s; b) the business (project) environment evolves for both public and private sectors based on a mutual commitment to P3 success; c) organizational capacity grows from learning, leading to greater confidence in executing P3 projects. The key contributions are: 1) P3 policy measures and political support require new actors. While policy measures and political support are complementary in the emergence and development of the institutional environment for P3s, such policy measures need new actors with the authority and drive to implement institutionalizable change; 2) There is a path-dependent response at the institutional level to project outcomes. Evidence suggests that path dependency is a factor in play, as later developments depend on earlier events at the political, policy/project and organizational levels. 3) There is a co-evolution of organizational field structures. As policy intervention clears the path for P3 emergence, supporting organizational field structures also emerge. 4) Institutional environment elements are mutually re-inforcing creating synergy. Thus, institutional environment elements affect, react and interact with other institutional environment elements in return and in diverse ways creating synergy.