Public-Private Partnerships Eli Lilly World Bank Institute

What is a Public Private Partnership? A public-private partnership (PPP) addresses complex public policy problems eligible for a multi-stakeholder solution. When do we use them? PPPs are often used when government lacks the operational resources to produce public value. Asia Business Conference 2/10/07 ©Alan M. Trager 2007

The Strategic Triangle Legitimacy & Support Public Value Operational Capabilities These ideas are developed at length in Mark Moore’s Creating Public Value: Strategic Management In Government

The Private Sector Strategic Triangle Demand Economic Value Operational Capabilities ©Alan M. Trager 2/10/07

Intersection of Value Creation Public and Private Demand Legitimacy & Support Operational Capabilities Economic Value Public Value ©Alan M. Trager 2/10/07

Intersection of Value Creation Public and Private Values Legitimacy & Support Demand Operational Capabilities Economic Value Public Value ©Alan M. Trager 2/10/07

Knowing, Selecting and Negotiating with Partners What does your partner want; what does your partner need; How can your partner help/hurt the partnership? What process have you used to determine the appropriate role of each partner? How do you manage expectations? How is shared discretion negotiated? Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Questions for Public Managers: What is the important “public value” the organization seeks to produce? What sources of “legitimacy and support” will authorize the organization to take action and to provide the resources necessary to create public value? What operational capabilities will the organization rely on, or will have to develop, to deliver the desired results? Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Questions for Partners How do public officials make strategic decisions to partner with the private sector? What motivates the private sector to participate as a partner? What tactics are used to market projects to potential partners? How are public-private partnerships negotiated? How is the perspective of those who make the deal different from those who are held accountable? Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Boston Park Plaza

Redeveloped Boston Park Plaza

Xintiandi

Xintiandi

Xintiandi

Asia Business Conference 2/10/07 Economic Development Shanghai Xintiandi Partners: - Shanghai Municipal Government - Shui On Land Limited Boston Park Plaza Partners: - Boston Redevelopment Authority - Boston Urban Associates Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Asia Business Conference 2/10/07 Economic Development Shanghai Xintiandi Conversion: dilapidated, crowded urban living  dining, retail and entertainment center Boston Park Plaza Conversion: decaying, underutilized areas at periphery of Boston Common  integrated mixture of residential, retail, office, hotel, and entertainment uses Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Asia Business Conference 2/10/07 Economic Development Boston Park Plaza Politics: Large number of public and private actors Funding: Private investors and use of eminent domain Shanghai Xintiandi Politics: Chairman of Shui on Land had been cultivating relationships with party leaders for decades Funding: Governmental funds Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Asia Business Conference 2/10/07 Economic Development Boston Park Plaza Major obstacles - Opposition by tenants of Park Plaza area - State Department of Community Affairs Shanghai Xintiandi Major obstacle: -Relocating 4,000 families living in area (completed in 43 days) Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Athens

Role of Marketing in the Success or Failure of Partnerships Marketing impacts credibility and trust Effective political management benefits from credible marketing Marketing to your partners and their constituents paves the way for broader acceptance and support Marketing buys time to build deal momentum Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

Asia Business Conference 2/10/07 Central Park Central Park Conservancy – a successful PPP World famous location that has created some of the most valuable real estate in the U.S. Strategic challenge is to impact other NYC Parks with less wealth Solution is the creative use of partners and resources Asia Business Conference 2/10/07 ©Alan M. Trager 2/10/07

© www.goldmansachs.com Tierra del Fuego

In 2004, Goldman Sachs and the Wildlife Conservation Society (WCS) formed a partnership to protect in perpetuity a vast tract of wilderness on the island of Tierra del Fuego, Chile. Routine acquisition of a loan portfolio turned into an opportunity to benefit global conservation through a partnership with WCS and Chilean conservationists. ©Alan M. Trager 2/10/07

Sources of Complexity & Risk Politics Community Involvement Motivations of Participants Negotiation/Expectations Economics Complexity of the Problem Vision ©Alan M. Trager 2/10/07