An analysis of governance policy and practice in public-private partnerships in transitional economies: A case study of Kazakhstan and Russia

This research examines management of public-private partnerships (PPPs) in the two transitional countries of the former Soviet Union - Kazakhstan and Russia. The study focuses on how key PPP actors in Russia and Kazakhstan perceive and adapt to contract regulation, risk allocation and dispute resolution challenges in PPP management. The qualitative study draws on data from 30 in-depth semi-structured interviews with the respondents from four partnership projects, national and regional PPP centres, law firms and the government. Through a qualitative analysis of the interview data, four principal themes have emerged including partner opportunistic behaviour in a PPP; partner interaction; risk management in a PPP; and constraints and impediments to effective PPP governance. Utilising the PPP governance concept as the guiding theoretical framework, the research highlighted partners' opportunistic behaviour. A private partner exhibited its opportunism in a tariff setting and cost increases, whilst the public sector partners demonstrated their opportunistic behaviour by shifting public acceptance risk to a private party, exerting pressure in order to achieve results faster than contracted and framing a private partner's management flexibility. The findings revealed that partners from both sectors tend to downplay the significance of governance structures that would permit them to effectively interact and resolve all kinds of issues including those of risk management. Investigation of tools for dispute resolution between partners showed that this area of collaboration is virtually non-existent. Partners largely disregard formal mechanisms for dispute resolution and excessively rely on informal relations. The research identified a large number of commonalities in PPP management and no major discrepancy between Kazakhstan and Russia with regards to partnership management and PPP critical success factors. In the latter, managing public-private relationship during the entire project term is the principal factor. The study developed a model for more deeply understanding PPP governance in the two countries, which is the thesis' original contribution to knowledge. The model's core is the emergent PPP policy paradigm that the governments in both countries use. The study delineated the paradigm's principal elements and dynamics that contribute to PPP management changes in Kazakhstan and Russia. The research also contributes to knowledge by enhancing opportunism's definition and its application in the PPP setting.