Private finance initiative : the theory behind practice
By: KEE, James Edwin
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Contributor(s): FORRER, John.
Material type: 
ArticlePublisher: Philadelphia : Routledge, January 2008International Journal of Public Administration - IJPA 31, 2, p. 151-167Abstract: Since its launch in 1992, the UK's Private Finance Initiative (PFI) is being used more often as an innovative means for governments to expand public infrastructures and services. The practical advantages and disadvantages of PFI have been considered, but theoretical justifications for PFI remain unexamined. Compared with conventional capital budgeting practice, we examined four theoretical justifications: the competitive market model, a new principal-agent relationship, shifting of risk, and the accountability problem. We found some theoretical support for PFI; however, some questions still remain about the theory and practice of PFI.Abstract: *Zhibin Zhang, doctoral student in Public Administration, George Washington University, assisted in the research of this article. This work was previously presented by James Edwin Kee at the 14th Annual Conference of the Association for Budgeting and Financial Management. October 10-12, 2002, Kansas City, Missouri
Since its launch in 1992, the UK's Private Finance Initiative (PFI) is being used more often as an innovative means for governments to expand public infrastructures and services. The practical advantages and disadvantages of PFI have been considered, but theoretical justifications for PFI remain unexamined. Compared with conventional capital budgeting practice, we examined four theoretical justifications: the competitive market model, a new principal-agent relationship, shifting of risk, and the accountability problem. We found some theoretical support for PFI; however, some questions still remain about the theory and practice of PFI.
*Zhibin Zhang, doctoral student in Public Administration, George Washington University, assisted in the research of this article. This work was previously presented by James Edwin Kee at the 14th Annual Conference of the Association for Budgeting and Financial Management. October 10-12, 2002, Kansas City, Missouri
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