Choosing State Owned Enterprises over Public-Private Partnerships for Infrastructure Governance: Explaining Institutional Change with Evidence from Denmark’s Transport Sector
This paper shows how State Owned Enterprises are sometimes preferred over the more known Public-Private Partnership model in building new infrastructure. Debate on Infrastructure governance in the transport sector has been dominated by the Public-Private Partnership model. Transport infrastructure was the largest sector for Public-Private Partnership projects in value terms in Europe in 2015. Research questions are: How do modes of infrastructure delivery change between State Owned Enterprises and Public-Private Partnerships in the transport sector? Why has Danish transport infrastructure governance preferred the State Owned Enterprise model over the Public-Private Partnership model?
The case of Denmark is examined where the State Owned Enterprise model is used for key transport infrastructure mega-projects. This paper uses theories of institutional change and focuses on gradual change mechanisms via the processes of displacement, layering, and conversion.
The method is to map all Danish transport infrastructures; road network, bridges and tunnels, rail network, airports and harbors in order to focus on differences in the development in the use of modes of infrastructure delivery and see institutional changes over time.
The renewed Danish model for state owned enterprises in the transport sector was chosen at a critical point in time when the Public-Private Partnership model was starting to grow in other countries. This State Owned Enterprise model combines a professional board, state guaranteed-loans and user charges. The State Owned Enterprise model was layered on the existing public provision of transport infrastructure and became locked-in for new transport infrastructure mega-projects. The results are relevant to other countries coping with choice between modes of infrastructure delivery and for a re-oriented academic focus on State Owned Enterprises as a research field worth exploring again.
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