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Tools Conductive to the Innovative Public Procurement and Developing Public-Private Partnership

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The aim of the paper is identification of variables appearing in public procurement and public-private partnership (PPP) procedures. The literature insufficiently defines the problem of innovation in the public procurement and PPP procedures. Identification and measurement, and then the use of appropriate measurable and immeasurable variables allow to create the transparent and understandable procedures for all market participants. A correctly adopted methodology allows to reduce the risk of failure to complete the task already at its initial stage. The paper attempts to distinguish individual elements of the procedure in public procurement and PPP procedures, taking into account the possibility of identifying and measuring variables describing different aspects of agreements between procurers and contractors (eg. The subject of the contract, criteria for evaluation of offers, etc.). The innovativeness of performed public procurement and contracts concluded within the framework of public-private partnership has been described using comparative analysis of individual proceedings. A publicly accessible database of performed public procurement and contracts in the formula of public-private partnership.
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Monograa recenzowana
Recenzent: dr hab. Grażyna Michalczuk, prof. UwB
Redakcja naukowa: Krystyna Leszczewska, Zoa Patora-Wysocka
Korekta językowa: Beata Siczek, Małgorzata Pająk, Lidia Pernak, Agnieszka Śliz,
Dominika Świech
Skład i łamanie: Małgorzata Pająk
Projekt okładki: Marcin Szadkowski
©Copyright: Społeczna Akademia Nauk
Studia i Monograe nr 100
2019
ISBN: 978-83-64971-75-4
Wydawnictwo Społecznej Akademii Nauk
Kilińskiego 109
90-011 Łódź
tel. (42) 664 22 39
(42) 676 25 29 w. 339
Spis treści
Krystyna Leszczewska | Wstęp .................................................................................. 5
Joanna M. Salachna, Marta J. Skrodzka | Rola mediacji w usprawnianiu
zarządzania nansami w podmiotach publicznych w świetle uwarunkowań
prawnych ..................................................................................................................... 9
Dariusz Perło | Przedsiębiorczość w regionach peryferyjnych ................................. 25
Krystyna Leszczewska | Przedsiębiorczość subsydiowana – trwałość podmiotów
gospodarczych powstałych ze wsparciem środków UE w województwie
podlaskim .................................................................................................................. 45
Józef Rogowski, Cecylia Sadowska-Snarska | Analiza rozkładu wynagrodzeń
według płci w Polsce .................................................................................................. 57
Stanisław Kaczyński | Konstytucja Biznesu pomocą czy przeszkodą
w prowadzeniu działalności gospodarczej? ............................................................... 75
Krystyna Leszczewska, Magdalena Forfa, Anna Bagińska | Wsparcie postaw
przedsiębiorczych studentów przez społeczność lokalną i akademicką
(na podstawie badań empirycznych) ........................................................................ 89
Mariusz Chmielewski, Joanna Pioch, Joanna Sadkowska | Analiza
korzyści i kosztów społecznych w realizacji regionalnych projektów
infrastrukturalnych .................................................................................................. 103
Adam Miara | Finansowanie rozwoju rm z branży rolno-spożywczej
Polski Wschodniej ...................................................................................................... 121
Tadeusz Kowalewski | Subsydiarne znaczenie edukacji dorosłych w środowisku
lokalnym. Innowacyjne rozwiązania. Studium przypadku ....................................... 133
Joanna Truszkowska | Diagnoza funkcjonalna – element skutecznej pomocy
dzieciom i młodzieży ze specjalnymi potrzebami edukacyjnymi ............................. 149
Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka | Tools
Conductive to the Innovative Public Procurement and Developing Public-Private
Partnership .......................................................................................................................... 161
Wacława Starzyńska
Maria Curie Skłodowska University in Lublin, Department of Statistics
and Econometrics, Faculty of Economics
Magdalena Panasiuk
Maria Curie Skłodowska University in Lublin, Department of Statistics
and Econometrics, Faculty of Economics
Mateusz Hałka
Maria Curie Skłodowska University in Lublin, Department of Statistics
and Econometrics, Faculty of Economics
JEL: H40, H57
Tools Conductive to the Innovative Public
Procurement and Developing Public-Private Partnership
Introduction
Innovation policy has been identied as a priority by the European Commission in
the Europe 2020 strategy. The main focus is concentrated close relation between
innovation and stimulating the development of a modern and sustainable econo-
my. It was emphasized that one of the elds where innovation should be imple-
mented is the system of public procurement, which combines the state administra-
tion and private entities through the pecuniary interest contract, concluded for the
fulllment of a public work [Europa 2020 2010].
The notion of innovation or the innovative procurement itself were not speci-
ed precisely for a long time in the Public Procurement Law from 2014 (PPL). The
amendment of 2016 dened the importance of the innovation in public procure-
ment in the description of a new procedure of awarding a public contract. Article
73a, paragraph 3 of PPL underlines that: “An innovative product, service, or work
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Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka
shall mean a new or signicantly improved product, service, or process, including
manufacturing, construction, or installation process, or a new marketing method
or a new organizational method in business activities, work organization or exter-
nal relations” [Public Procurement Law 2018].
The present paper focuses on public procurement and public-private partner-
ship (PPP) as including both changes and processes aimed at increasing the quality
of works of social interest. Through engaging appropriate modern technologies,
capital, and suitable managing methods, the public-private partnership becomes
an innovation supporting local and regional growth.
The aim of the paper is to present the potential still unlocked in the public
procurement system and the public-private partnership (PPP) in possibilities of
purchasing products, being the subject of innovative solutions, by the public sec-
tor. The innovation was based on the Polish and European legislation, reports of
institutions responsible for public procurement and PPP, and literature which con-
cerns functioning and evaluating the public procurement system.
Aspects of public procurements conducive to the innovation
An increased politic interest focused on the public spending conducive to sustainable
growth, environmental protection, promotion of social interest and supporting innova-
tion, may be observed in the European Union in recent years. Public procurement is in
line with the broad strategy of an innovative economy, as it may motivate the develop-
ment and the way how the innovative solutions are implemented [Panasiuk, Kłoda 2010].
Supporting the innovativeness within the procedure of awarding a public con-
tract may be provided in dierent aspects. Main elements regarding these actions
may be observed in:
·the description of the subject-matter of the contract;
·the procedure of awarding the contract;
·the description of the criteria of the oer;
·other actions, focused particularly on the behavior and actions of the parties,
participating in the procedure of awarding a public contract.
The most visible sign of innovativeness in public procurement is an appropriate
description of the subject-matter of the contract. This subject-matter may be a su-
pply, service or construction works.
According to the interpretation by A. Borowiec, an innovative supply may be
a supply of a material or a non-material innovation [Borowiec 2015]. The rst one is
163
Subsydiarność – aspekty ekonomiczne i społeczne | Tools Conductive to the Innovative Public Procurement
and Developing Public-Private Partnership
related to the supply of a completely new, previously unknown product, or a pro-
duct which was considerably improved. Non-material innovation is related to a co-
pyright, i.e. the author’s economic rights or industrial property rights, which have
not been used in the institution so far. These include inventions, industrial designs,
utility models, improvement proposals, topographies of integrated circuits.
An innovative service is in practice a contract for conducting research. The
aim of this service is to study new processes or methods for the organization,
whereas the subject-matter of the contract does not have to be a new one, for
it may cause an improvement in a solution that currently exists. An example of
this can be an implementation of a software enabling the introduction of a new
way of institution’s functioning or organizational systems, not previously used
[Sienna Sp. z o.o. 2007].
Figure 1. Innovative public procurement – elds of occurrence and its components
Source: own study.
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Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka
Innovativeness in public procurement does not only manifest itself in the de-
scription of the subject-matter of the contract. Neighboring aspects should also
be analyzed, for example how the procedure of awarding a public contract is fol-
lowed and if appropriate procedures are used. Awarding an innovative contract
is not connected with one particular procedure, but the way how the procedures
are constructed has a stimulating impact on innovation. These procedures include
those based on negotiated procedure, dialogue or innovation partnership.
The particular emphasis should be put on the innovation partnership. It was in-
troduced in an amendment in 2016 and is purely directed at innovative solutions
and procurement. Its sense is explained in Article 73a, paragraph 1 of PPL: “Innova-
tion partnership is a contract award procedure type as part of which, in response
to a public contract notice, the contracting authority invites economic operators
admitted to the procedure to submit initial oers and negotiates with them, and
then invites them to tender for the development of an innovative product, servi-
ces, or works unavailable on the market, and sales of these products, services, or
works.” [Public Procurement Law 2018]. The partnership is based on steps mirrored
in a research-development process. An element that distinguishes this procedure,
is a possibility to choose a few tenders made by the contractors, which leads to
concluding a contract with many contractors. Consequently, the main risk of the
contractor, regarding innovative actions, i.e. incurring the R&D expenses, when the
competitor/rival is awarded the contract, is decreased. 2017 was the rst full year of
this procedure’s functioning. Only 0.01% of all the procedures were under the inno-
vation partnership [Urząd Zamówień Publicznych 2018]. Other procedures include
negotiated procedure with publication, negotiated procedure without publication,
technical dialogue, and competitive dialogue. However, similarly to the innovation
partnership, these procedures have an insignicant share in the market. Only the
negotiated procedure with publication was used in 1% of the cases, other procedu-
res did not exceed the level of 1% of all the concluded public procurement contracts.
When the subject-matter of the contract and the procedure are determined,
one has to determine the evaluation criteria for the oers. Innovativeness is not
driven by the criterion “100% price”, therefore in innovative procurement, the mul-
ti-criteria models, based on tenders most economically advantageous, are used.
To emphasize the innovativeness, one may use [PARP 2011]:
·the criterion of Life Cycle Cost (LCC) – this approach shall include, apart from
the purchase cost, the cost of use, maintenance, and recycling;
·the criterion of functionality – in this approach, the subject-matter of the con-
tract shall have specied functions or fulll specied aims, having inuence for
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Subsydiarność – aspekty ekonomiczne i społeczne | Tools Conductive to the Innovative Public Procurement
and Developing Public-Private Partnership
example on the eciency, maintainability, reliability, capacity, and possibility to
be further developed;
·the criterion of the environment – means the use of the best available techno-
logies (or nding new ones) in environmental impact;
·the criterion of society – means that social issues, e.g. help for specied social
groups in the area, shall be included in the public procurement. Through a com-
parison of social issues and innovativeness, one may give an example of new
solutions concerning the help for the disabled.
It is vital, apart from dening these non-price criteria, to set a high percent
importance of them in the oer’s evaluation so that the contractors will nd it
rewarding to put an emphasis on the innovative aspect of the oers.
The elements discussed above provide tools for using innovation in the public
procurement procedure. Although, how they are used is not a xed solution, and
here the people start to play a crucial role. Data unambiguously show that inno-
vative procedures are used only sporadically [Urząd Zamówień Publicznych 2018].
The main problem is not the lack of legal procedures, but the lack of an ability to
apply them. State administration employees choose tried schemes, based on open
tendering with the high importance of the price and the subject-matter of the pro-
curement that is unambiguous and does not support the new solutions, instead of
generating demand for innovation through public procurement. Such a solution
guarantees the simplicity of the procedure and minimizes the risk of failure. The con-
tracting parties often lack in knowledge and experience of how to interpret the PPL
provisions. Another problematic aspect is also a long-term planning and awareness
of potential prots from innovations, as it is connected with an early disclosure of
the contractor’s intentions so that the interested contractors will have enough time
for preparing a suitable oer. PPL provides a possibility of issuing a prior informa-
tion notice about agreements planned. This notice can be posted in the contractor’s
seat, in the local or nationwide press, or in information notice about agreements
planned in the Ocial Journal of the European Union (Article 13(1) PPL). This possibi-
lity should become an obligation in the case of innovative procurement. Issuing an
information notice does not exempt the contracting party from the obligation of
further information notices regarding particular procurement.
To enable the best possible preparation of the contractors’ tenders, the con-
tracting entities should set the longest time limit for submission of tenders, despi-
te the fact that from the legal point of view issuing an information notice about
agreements planned enables the contracting entities setting shorter time limits
for submission of tenders in further procedures. Barriers to innovativeness are
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Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka
also present by the contracting entities’ side, but more often they are caused by
the behavior of the contracting parties or the legal system of public procurement.
Identication of variables in innovative public procurement
procedures
In statistical theory, the main division of variables includes quantitative and qualitati-
ve ones [Starzyńska 2009]. Quantitative (measurable) variables are presented with
numbers, while qualitative (immeasurable) ones are presented with a description.
Because of the complexity of the innovative procedures, variables in those
procedures are hard to classify. Apart from the description of the variables, the
legal framework is a cluster of procedures and guidelines/provisions, which are
hard to be measured, as they have a binary character.
In quantitative variables’ classication, one may distinguish elements descri-
bing particular public procurement in numbers and evaluation criteria for tenders.
Quantitative variables are needed for setting appropriate requirements for ten-
ders (technical parameters of procurement) and preparing statistics concerning
the functioning of public procurement system (e.g. number of oers, number of
contractors, number of oer’s evaluation criteria, duration of a procedure, num-
ber of appeals, etc.). The basic variable for evaluation is the price as a fundamental
evaluation criterion. Indicators as Value for Money (VfM) or models using many
variables (as percentage shares) are used in innovative procedures. VfM shows the
relation between the cost and the value of the contract. The cost is based on the
life cycle of a product, whereas the value is calculated on the basis of the quantity,
quality or the level of fulllment of a particular procurement. The usage of VfM is
very broad, especially in Western Europe, and enable to evaluate oers, so that
they fulll the requirements of a contracting party in the best way [Ministerstwo
Rozwoju 2017].
Qualitative variables concern the functioning of the public procurement sy-
stem. The procedures of public procurement, recommendations for changes of
legal provisions and subject matter of the contract may be distinguished within
the legal system. These serve to determine the features and functions of the oer.
Another aspect is determining the level of knowledge and competence of market
entities. Ordinal variables play here particularly signicant role. These can be used
for the description of the part of oers’ evaluation criteria, especially those ba-
sing on the procurement’s quality and functionality.
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Subsydiarność – aspekty ekonomiczne i społeczne | Tools Conductive to the Innovative Public Procurement
and Developing Public-Private Partnership
Innovative procedures are characterized by many elements that include both
quantitative and qualitative variables. Relations between the contracting party
and business and evaluation of an inuence of public procurement on the envi-
ronment are examples of these. In such aspects, elements describing economic
side – quantitative – are mixed with qualitative ones, which describe mostly social
and environmental aspects.
Innovative public-private partnership
Public-private partnership describes a situation in which a public and a private entity
undertake a venture together and they share both tasks and risks [Ustawa o partner-
stwie publiczno-prywatnym 2008]. Public-private partnership (PPP) is one the most
popular innovative public procurements procedures in reorganizing public procu-
rement, especially in the case of big public investments [Ng, Wong, Wong 2013]. In
procedures basing on a public-private partnership, the supplier is responsible for the
purchased product or service for a longer time. The public sector sets nal aims but
does not determine a priori how they should be achieved [Yescombe 2007].
A public-private partnership, because of the engagement of private entities and
risk division between the parties, leads to an increase in innovativeness of an econo-
my through the development of the nancial system and guarantees of risky inno-
vative ventures [Grudzewski, Hejduk 2000]. According to A. Pomykalski, everything
that inspires the human to change is a source of innovation [Pomykalski 2001].
Examining innovativeness from the point of view of entities, PPP enables to
increase the quality of fullled public procurement. Public-private partnership inu-
ences attractiveness and strengthens competitiveness between regions, as far as
enticing key partners is concerned. Enterprises, which focus on their closest environ-
ment, fulll their strategic aims thanks to the cooperation with the public sector. They
implement innovative processes and follow the state’s policy [Książek, Wereda 2012].
Three kinds of innovation may be distinguished in Polish public-private part-
nership [Sobiech-Grabka 2014]:
·innovation concerning project nancial strategy,
·innovation concerning the remuneration arrangement for project’s members,
·innovation concerning project management.
In traditional public procurement, contrary to a public-private partnership, the
division of obligations between the parties is not equal. PPP enables to share ob-
ligations connected with the project, which leads to determining better features
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Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka
of a procurement and know-how by the side of both the contracting party and
the supplier [Krtalic, Kelebuda 2010]. In the case of infrastructural projects, the
higher responsibility of the supplier may include for example planning, nancing,
maintaining, and additional services connected with the purchased real estate.
Prots, arising from the implementation of PPP, concern both parties and
include an improvement in cost-eectiveness, quality, eciency, risk evaluation
and transparency throughout the process of awarding a contract [Majamaa,
Junnila, Doloid, Niemisto 2008, Yescomble 2007]. According to E.I. Hoppe and
P.W. Schmitz, PPP encourages to implement innovative solutions both in the case
of public infrastructure and services [Hoppe, Schmitz 2013]. Although the poten-
tial of innovative methods of awarding a contract is commonly believed to be the
most innovative, the decision about the innovative procedure of awarding a con-
tract is frequently determined by nancial savings that can be achieved [Uyarra,
Edler, Garcia-Estevez, Georghiou, Yeow 2014]. Finances, as a dominating criterion,
lead to applying solutions, which are not suitable for real users of a service. In
consequence, nancial losses occur, and they are covered by the contracting par-
ty and the suppliers, because of the higher adjustment costs and lower life-cycle
costs caused by the consumer dissatisfaction [Satish, Shah 2009].
If the procedure was chosen mainly on the basis of value gained by the users,
the cooperation, engagement, and networks would be more frequently taken as
the main advantages of a model, not as nancial arguments [Lähdesmäki, Kilkki
2008]. The most crucial barrier in innovative PPP projects includes the lack of in-
teraction between the entities, usage of strict provisions on the contrary to the
specication based on results, low competence of the contracting party and poor
risk management [Uyarra, Edler, Gee, Georghiou, Yeow 2013]. Active cooperation
with nal users can be perceived as a promising solution, enabling solving all these
problems. According to Uyarra et al. both the contracting party and the contrac-
tor may be blamed for possible barriers. The contracting party often refuses to
fully introduce innovations through procurements, whereas the suppliers cannot
see the potential of the public sector as a consumer. An additional barrier is a coo-
peration between the entities which may be time- and resource-consuming, which
in consequence makes the process unsuccessful.
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Subsydiarność – aspekty ekonomiczne i społeczne | Tools Conductive to the Innovative Public Procurement
and Developing Public-Private Partnership
Tools conducive to choose between traditional public
procurement and public-private partnership, and tools
conducive to prepare PPP projects
The research team of Harvard Kennedy School of Government developed a tool su-
pporting the state and local administration’s sta in determining when to choose
a traditional public procurement and when to decide on a public-private partner-
ship. This tool is to be found on webpage www.P3Guide.com. The manual has been
created on the basis of experiences and interviews with clerks responsible for pub-
lic procurement, practitioners of the nancial market, engineering practitioners
and suppliers of infrastructure. The research team, who invented P3 Guide tool,
studied also literature on PPP and analyzed cases of big public procurement, and
procurements within PPP procedure from the United States and abroad.
Questions and answers are prepared for procurements within the large-scale basic
infrastructure, e.g. within transport, roads, bridges, social infrastructure, ports, and
airports. These can be also used for other kinds of infrastructure, i.e. schools, apart-
ments or an Internet connection. “Decision treewithin the tool denes dierent stru-
ctures of PPP and enables the viewer an access to decision-making tools. These tools
provide him or her with a set of questions connected with four main analytical aspects
of decision-making: legislation, nances, technical requirements, and policy. Basing on
the answers, the system provides the viewer with a suitable procurement and metho-
dology. This can be a starting point for an analysis and making a decision, whether
a PPP model is suitable for a particular project [Public-Private Partnerships Guide].
European PPP Expertise Centre developed a tool which makes preparing a pro-
ject based on PPP easier for public entities. The aim of the tool is to help in syste-
mizing the process of organizing PPP and enabling an evaluation of own readiness
to start the procedure.
The evaluation of readiness to start a project within the PPP procedure is ba-
sed on an analysis of answers provided by the public entity, concerning their expe-
ctations. The tool generates the result, basing on the answers to question asked in
the questionnaire and summarizes the readiness of the project and indicates po-
ssible gaps in the procedure. This tool is concentrated on the actions undertaken
before initializing the procedure, which are aimed at choosing the right private
partner. Two main aspects of the project preparation are researched: determining
the scope of the investment and preparation of the project as a PPP. The main
actions include: building a project team, project risk analysis, evaluation of the PPP
in comparison to other procedures of fullling an investment, and preparation
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Wacława Starzyńska, Magdalena Panasiuk, Mateusz Hałka
of a procedure of a private partner. The majority of PPP project’s crucial aspects
occur at the phase of its creation, therefore the tool developed by EPEC may be
used to evaluate projects from dierent sectors or dierent investment values
[Narzedzie wspierajace przygotowanie projektu PPP 2016].
The tool may be downloaded from the website www.ppp.gov.pl. To use it, the
user has to have a spreadsheet for MS Excel 2010. The sequence of actions is
presented in Figure 2. The green frames present detailed questions concerning
actions connected with the preparation of the project, whereas the yellow frames
check, whether the project is ready to proceed to the next step.
Figure 2. Structure of the questionnaire supporting the preparation of PPP projects
Source: own study based on Narzędzie wspierające… [2016].
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Subsydiarność – aspekty ekonomiczne i społeczne | Tools Conductive to the Innovative Public Procurement
and Developing Public-Private Partnership
Public-private partnership contributes to the improvement of public invest-
ments, as it diversies sources of nancing the investment, introduces the tools,
which are aimed at increasing the eectiveness of a private partner functioning
or uses the private entity’s organizational skills. After conducting an appropriate
analysis, with the usage of tools supporting PPP, this kind of partnership may have
signicant, measurable prots.
Conclusions
Public procurement is recently viewed as having an important potential to drive
innovation. In the paper some elements like competences procedures and relation-
ships in public procurement inuence suppliers’ ability to innovate are presented.
It is hard to identify and classify variables which could be appropriate to describe
the complexity of the innovative procedures. Among them some indicators like the
value of public procurement number of potential suppliers, tender specications
like evaluation criteria for tenders, duration of a procedure can be found. However,
most variables are qualitative. They concern mainly the functioning of the public
procurement system. Another aspect is determining the level of knowledge and
buyer-supplier interaction.
In many countries, limitations upon the public funds available for infrastructu-
re have led governments to invite private sector entities to enter into long-term
contractual agreements for the nancing, construction and/or operation of capital-
intensive projects. Public-private partnerships reect market principles and consti-
tute a strategy for improving public management. In the article mentioned tools to
support employees of state and local government in determining when to choose
the traditional public procurement and when to decide on public-private partner-
ship. The tools through sequentially asked questions help public entities make the
right decision. After conducting an appropriate analysis, with the usage of tools su-
pporting PPP, this kind of partnership may have signicant, measurable prots.
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Łódź - Warszawa 2018 | ISSN 2543-8190
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Chapter
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This article is the first attempt to compile comprehensive data on infrastructure finance in Europe. We decompose infrastructure finance by institutional sector (i.e. public versus private) into its main components, which consist of traditional public procurement, project finance and finance by the corporate sector, and analyse how the roles of the public and private sectors in financing infrastructure have evolved over time, especially during the recent economic and financial crisis. In contrast with government finance that is slightly up, private finance, in particular project finance through Public-Private Partnerships, has fallen substantially during the recent crisis, reversing, at least temporarily, the longer-term trend of more private and less public financing of infrastructure.
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A government agency wants a facility to be built and managed to provide a public service. Two different modes of provision are considered. In a public-private partnership, the tasks of building and managing are bundled, while under traditional procurement, these tasks are delegated to separate private contractors. The two modes differ in their incentives to innovate and to gather private information about future costs to adapt the service provision to changing circumstances. Depending on the potential benefits of such adaptations, the government agency's preferred mode of provision may be different from the one that should be chosen from a welfare perspective.
Wpływ innowacyjności polskich przedsiębiorstw na ich konkurencyjność
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Kaczyński S. (2017), Wpływ innowacyjności polskich przedsiębiorstw na ich konkurencyjność, "Przedsiębiorczość i Zarządzanie", t. XVIII, z. 9, cz. II, wyd. SAN, Łódź-Warszawa.
Zasada pomocniczości jako fundament nowoczesnego państwa
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Łuczka K. (2006), Zasada pomocniczości jako fundament nowoczesnego państwa, "Resovia Sacra", R. 13, Rzeszów.
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Musialik T. (2013), Stosowanie zasady pomocniczości na gruncie traktatu z Lizbony, "Modern Management Review", vol. XVIII(4).