A principal-agent theory perspective on PPP risk allocation
journal contributionposted on 2019-01-01, 00:00 authored by Asheem ShresthaAsheem Shrestha, Jolanta Tamošaitienė, Igor MartekIgor Martek, M. Reza HosseiniM. Reza Hosseini, David J Edwards
This study proposes a framework for the allocation of risk in public private partnerships (PPP) projects. Its contribution lies in the recognition and incorporation of risks introduced by project stakeholders, and as articulated by the principal-agent theory (PAT). The framework assesses risks and routes these risks to those parties best equipped to mitigate their impact on the project. This allocation of risk is facilitated by a thirteen-step process. The practical benefit of this study lies in outlining a clear, systematic method for allocating risk efficiently to both the government and private enterprise parties of the project. In so doing, risk mitigation can be expected to improve project performance, optimize stakeholder goals, and enhance sustainability objectives, including improved operational life-cycle efficiency and elevated social and community benefits.
PublisherMary Ann Liebert
LocationNew Rochelle, N.Y.
Publication classificationC1 Refereed article in a scholarly journal
Copyright notice2019, The Authors
Science & TechnologyLife Sciences & BiomedicineGreen & Sustainable Science & TechnologyEnvironmental SciencesEnvironmental StudiesScience & Technology - Other TopicsEnvironmental Sciences & Ecologyrisk allocationpublic private partnershipsPPPprincipal-agent theoryPUBLIC-PRIVATE-PARTNERSHIPSMORAL HAZARDPROJECTSCHINAMANAGEMENTBEHAVIORSUCCESSWATERPERFORMANCEPROCUREMENT