Management controls for minimising risk in public-private partnerships in a developing country: Evidence from Sri Lanka

Abstract

Purpose

The purpose of the study is to examine the use of management controls by a public partner to minimise risks associated with a public-private partnership (PPP) in a developing country.

Design/methodology/approach

Using case study method, management controls used in a power project formed as a PPP are examined based on data gathered from semi-structured interviews and documentary analysis.

Findings

The study reveals that the public partner of the PPP used multiple controls depending on the nature of risks in different phases of the project. While bureaucratic control was the predominantly used control pattern throughout the three phases (namely, selecting, building and operating) of the PPP, trust-based controls also played an important role. Market controls on the other hand played, somewhat, a nominal role, particularly in the selecting phase of the project. The study also highlights the problematic nature of forming PPPs in developing countries despite the various benefits associated with such organisational arrangements. Additionally, the study provides insights into how certain contextual features of developing countries affect the way in which controls are applied.

Practical implications

The insights provided in this paper would be beneficial to policy makers, in developing countries in particular, when making decisions in relation to implementation, management and risk control of PPPs.

Originality/value

This study makes an original contribution to the existing literature on PPPs by examining the way in which management controls are used to minimise risk in a PPP in a developing country.

Citation

Appuhami, R. and Perera, S. (2016), "Management controls for minimising risk in public-private partnerships in a developing country: Evidence from Sri Lanka", Journal of Accounting & Organizational Change, Vol. 12 No. 3, pp. 408-431. https://doi.org/10.1108/JAOC-10-2013-0075