There is a chastening appendix in Michael Porter’s 1990 book The Competitive Advantage of Nations, in which he offers tabulated examples of how nations come to specialise in certain areas of production, just as businesses do. I paraphrase, but it reads something along the lines of:
Germany: Machine tools, luxury cars, petrochemicals
Japan: consumer electronics, cars
USA: software, telecommunications, pharmaceuticals
But this week, surely our biscuit manufacturers can be joined by designers of Public Private Partnerships (PPP) as the envy of the world. While the precise design of the banking bail-out is no doubt determined by the contingent economic and (to a lesser extent) political vagaries, it is surely no coincidence that we are leading the world in an area that we have been dabbling in since the early 1980s: tweaking the legal and managerial boundary between the state and private enterprise.
A PPP is a concept with no particular referent. The ippr carried out a commission on the topic in the early days of New Labour, which attempted to codify and categorise the possibilities, but these are fairly diverse. Most are Private Finance Initiatives (PFI), in which the private sector finances, builds and project manages something, then hands it back to the state.
Generally the term ‘PPP’ simply implies a more complicated contract with more subtly defined outputs, such as that used for the London Underground PFI. But then there is hybrid ‘Public Interest Company’ model (such as Channel 4 or Welsh Water). Then there are instances where the state part-priv…