Is there such a thing as political business cycles in Public-Private Partnerships? The Brazilian case.

Bertulucci, Sarmento Luísa Maria

Abstract:

Public-Private Partnerships (PPP) have become a worldwide phenomenon over the past decades. They were extensively used as a governance tool, with the main objective of increasing efficiency, developing new infrastructure investments and closing the “infrastructure gap” in many countries, solving social problems and political pressures (Flinders, 2005; Parker and Hartey, 2003). Most of the PPP literature still focus on the technical and economic aspects of the projects, as such, more research is due to understanding how political variables influence the process, especially considering its implications to good governance. Developed in the 1970s, the theory of political business cycles focused its arguments on the ability of politicians to handle the economy in the pursuit of particular interests, motivating the emergence of partisan or opportunistic cycles and behaviours. As Maskin and Tirole (2007) mention, there is considerable evidence that political preference for PPP contracts is motivated by electoral imperative and circumventing budgetary constraints, not coinciding with the main objective of maximizing welfare The aim of this research is to test the existence of political business cycles in a particular national political-administrative reality: the Federal Democratic Republic of Brazil. In a fiscal retrenchment environment and, more recently, the economic crisis, Brazil was not immune to this worldwide trend, adopting PPP in several sectors of activity over the last decade. Research covers the PPP projects in operation in Brazil, during the period 2006 and 2015.

Área(s) temática(s):

• 2. Gobierno, Instituciones y Comportamiento Políticos

Año:

2016

Tipo de publicación:

Paper/Extenso Congresos GIGAPP

Número:

2016-313

Serie:

VII Congreso Internacional en Gobierno, Administración y Politicas Públicas. GIGAPP 03-05 octubre 2016.

Dirección:

Madrid, España

Organización:

GIGAPP. Asociación Grupo de Investigacion en Gobierno, Administración y Políticas Públicas

Mes:

Octubre

Comentarios:

Firmino, Sandra Isabel Rasteiro Assistant Professor<br /> School of Social and Political Sciences– Universidade de Lisboa<br /> e-mail: sfirmino@iscsp.ulisboa.pt <br /> .This paper proposal is part of an ongoing Ph. D research investigation, included in a larger comparative study of PPP within Brazil and Portugal. The theory of political economic cycles has provided mixed evidence, not withstanding clearly to the existence of these cycles, especially in already well-established democracies, as opposed to the more recent ones. In this matter, Brazil can be a relevant and insightful case to analyze. On the other hand, our paper (as focus on the use of PPPs as our dependent variables, i.e: the amount of investment and the number of projects) is beyond the range of traditionally used variables (budget cycles, unemployment, etc.), and, to our best knowledge, is completely innovative. We present for discussion ends, the research model and the preliminary results of the investigation, hoping to some feedback and contributions to the development and further enhancement of the research.