Géry Deffontaines: The Expansion of the Realm of Finance? Public-Private Partnerships and the ‘Financialisation’ of Public Procurement. A Proposal for Analysis through Economic Sociology

By examining the introduction of public-private partnerships in France and the involvement of financial actors in this context, this thesis sets out to analyse public-private partnerships [PPPs] in terms of the ‘financialisation’ of public procurement.

It draws on a wide range of materials and areas of investigation (developments in public procurement law, relevant literature, observation of stakeholders and initiatives promoting PPPs, interviews with financial stakeholders, and work placements at financial institutions involved in PPPs). In line with Bourdieu’s framework for studying the social structures of the economy, our approach involves interpreting this diverse material through multiple levels of analysis within the field of economic sociology.

 PPPs are first analysed from the perspective of the social construction of a market. We propose ideal-typical, decontextualised organisational characteristics that allow public procurement arrangements to be classified as “PPPs” where long-term comprehensive contracts (design, construction, maintenance) are established, and where the public contracting authority, in return for payment of rent, from a service providing a building, equipment or infrastructure to support the final public service. Legal certainty is added as a prerequisite for their existence.

This approach ties in with our longitudinal study of changes in the legal rules specific to the French context, which for a long time stood in the way of the establishment of PPP-style contractual arrangements free from legal risks. The disengagement from an old rationality embedded in administrative law is followed by a re-engagement with a new rationality. Governed by regulatory mechanisms in line with the recommendations of New Public Management, PPPs reflect, through their intrinsic characteristics, the contributions of microeconomic theory on optimal forms of public procurement. Competition for the market is combined with a governance architecture based on contracts, the cornerstone of which is the control function provided by finance. This legal, historical and conceptual interpretation of PPPs finds its empirical expression in the mobilisation and argumentative repertoire of a coalition of public and private actors with a stake in the successful development of PPPs.

In practice, public-private partnerships open up a segment of public procurement to the financial sector. The project financing approach employed involves stakeholders with divergent interests and timeframes. The financing mechanisms – structures and tools – are analysed as a series of securitisation operations, contributing to the fragmentation of public infrastructure into assets linked to the financial markets and their requirements. The analysis of the supply side also examines the stakeholders – banks, investment funds, consultants – involved in PPPs, a field of actors whose dynamics of division of labour are studied. By the end of this work, the project finance industry emerges as a new player in urban development and public services. Beyond our aim of proposing a sectoral research framework contributing to the sociological analysis of financialisation, this thesis sheds light on new challenges for public policy.