The public-private partnerships in any nation are meant to bring mutual gain to both parties. However, governments through their respective agencies enter partnerships with the private sector for regulation purposes. Free economies allow business entities to run operations for for-profits maximization regardless of prevailing conditions in the market. Such a situation calls for public-private intervention, which will ensure a level playing field for players in the sectors to facilitate equal distribution of resources.
Every nation, through its implementing agencies, should provide essential services to the public. Health, security, and education, among others, remain a primary responsibility of governments. The private sector partners with government agencies to provide standard health and education services without which governments cannot perform well alone (Rashed & Shah, 2020). This principle of interaction is a traditional form of cooperation that meets the standards of mutually beneficial relationships and has fair justifications. Each of the parties receives the necessary dividends through the allocation of funds and resources to maintain the resilience of different spheres. For the private sector, a focus on social needs is natural, which, in turn, explains the need to monitor the relevant fields carefully. Governments are forced to operate with the available volume of funds to provide support for multiple areas, and assistance from the private sector in the form of tax payments and other subsidies is mandatory. Therefore, such interaction is fair, despite the attempts of both parties to find profitable ways to realize the maximum of their objectives, while spending a minimum of resources.
Most infrastructural developments are owned by private firms and individuals in the USA. Partnering with these companies helps governments make excellent physical planning of urban centers and towns (Deng & Elsinga, 2020). Decentralization and centralization of urban centers can be facilitated effectively through public-private ventures. The government should actively participate in the development process to ensure balanced regional economic growth. Besides, to ensure standard infrastructure, government agencies task these firms to build and construct structures according to the proposed policies. This check is vital given that profit-making entities value profits more than standards.
Effective service delivery cannot be achieved by the government alone. The private sector, through technological research and advancement, uses advanced tools and machinery to improve and lower the cost of production. Due to high-rocketed profits, firms are bound to use sophisticated methods to continue reducing production costs, thus improving efficiency (Acemoglu & Restrepo, 2019). Obsolete equipment and manual processes increase production costs due to low processing power.
Moreover, public expenditure cannot be sustained by the incomes the governments generate. The public-private partnership helps facilitate projects exceeding government allocations in terms of expenditure. Financial institutions, NGOs, firms, and individuals partner with government agencies to provide required services (Vaslavskaya, 2020). These may be in the form of loans, grants, charities, and gifts. The project’s funding may be on 50/50 or any ratio as agreed by the parties. This mechanism is also just since each of the parties in such transactions benefits. If the parties fail to come to an agreement, this will lead to a loss of balance and the transfer of property rights and other promising opportunities to only one sector. This, in turn, is fraught with financial disruption when either governments or private agencies can monopolize markets and damage the economy. Thus, a productive and mutually beneficial interaction is not only just but also reasonable.
The public-private partnership creates a mechanism to allow different organizations to grow their stake in the market, thereby building a profitable area for investment. Other services provided by the private sector that needs regulation include health, education, and infrastructure development (Som & Alias, 2020). For standardized service delivery, public-private cooperation is essential to prevent over-exploitation, unstandardized services and goods, and other criminal activities that may be associated.
Public-private cooperation is a convenient and profitable form of interaction for both the authorities and private agencies and structures. Being unable to finance and develop a number of industries on their own, the parties are forced to make concessions and create an environment for productive communication and the exchange of resources. This partnership mechanism explains attempts to minimize costs and find more profitable ways to use the available resources, but in general, the aforementioned cooperation is just.
References
Acemoglu, D., & Restrepo, P. (2019). Automation and new tasks: How technology displaces and reinstates labor. Journal of Economic Perspectives, 33(2), 3-30.
Deng, W. J., Hoekstra, J. S., & Elsinga, M. G. (2020). The urban-rural discrepancy of generational housing pathways: A new source of intergenerational inequality in urban China? Habitat International, 98, 102102.
Rashed, A. H., & Shah, A. (2020). The role of the private sector in the implementation of sustainable development goals. Environment, Development and Sustainability, 1-18.
Som, R. M., Omar, Z., Ismail, I. A., & Alias, S. N. (2020). Understanding leadership roles and competencies for public-private partnership. Journal of Asia Business Studies, 14(4), 541-560.
Vaslavskaya, I. Y. (2020). Public-private partnership and financing the development of national infrastructure: safeguarding public finance sustainability. In Social, Economic, and Environmental Impacts between Sustainable Financial Systems and Financial Markets (pp. 261-288). IGI Global.