The Nature of Contracting Hazards in Public–Private Partnerships—Evidence from Ireland

The use of public–private partnerships (PPP) for the procurement of infrastructure and related services can be a complex and challenging process. This article adopts a transaction cost regulation perspective to examine two PPP cases from Ireland that encountered significant obstacles to successful procurement. It finds that both procurements met hazards including uncertainty about the viability of the bids and opportunistic behavior by preferred bidders that held quasi-monopoly positions. The public nature of both cases provided a fertile ground for opportunistic behavior by political opponents and other “interested” parties. The analysis shows how the governance of PPPs is shaped by the attributes of the transactions and the interaction of economic and political hazards that create transaction costs.