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Public-Private Partnerships in the Context of the European System of Accounts (ESA95)
Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100-Campus of Espinardo (Murcia), SPAIN
Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100- Campus of Espinardo (Murcia), SPAIN
Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100- Campus of Espinardo (Murcia), SPAIN
- 1 Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100-Campus of Espinardo (Murcia), SPAIN
- 2 Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100- Campus of Espinardo (Murcia), SPAIN
- 3 Department of Accounting, Faculty of Economics and Business, University of Murcia (Regional Campus of International Excellence “Campus Mare Nostrum”), 30100- Campus of Espinardo (Murcia), SPAIN
Open Journal of Accounting·Volume 01 (2012)·Pages 1–10·Published 24 July 2012·DOI10.4236/ojacct.2012.11001
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Abstract
This paper makes an analysis of the European System of Accounts (ESA95) financial treatment of Public-Private Partnerships (PPP). PPP are complex operations that allow incumbents to create infrastructures while hiding debt, with an eye on the next elections. However, the sad part of the story is that PPP are more expensive than traditional contracts in the long run. We think that PPP are not always the best solution. Governments should allocate the risk to the party that is the “least cost avoider”, i.e. , the party best suited to control and/or bear the risk. Without this approach, the public sector runs the risk of using PPP with the aim to achieve inadequate goals, for example to achieve a short-term improvement of public accounts, and at the same time, worsening the long-term financial picture.
KeywordsPublic-Private PartnershipsEsa95Government DebtGovernment Deficit
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