System architecture of public-private partnerships: institutional mechanisms of risk allocation and Value for Money formation

Abstract

The article examines the institutional architecture of public-private partnerships (PPP) as a system of interaction between the state and the private sector, based on the functional differentiation of roles and the asymmetric allocation of risks. The complementary nature of their functions is substantiated, ensuring enhanced efficiency in the implementation of infrastructure projects. It is established that the key determinant of PPP effectiveness is risk allocation, which affects project outcomes through changes in cash flows, cost of capital, and expected risk-adjusted costs. It is demonstrated that optimal risk allocation ensures the minimization of total costs and the formation of a positive net present value (NPV), which determines the achievement of Value for Money. The scientific novelty lies in the further development of an integrated approach to PPP analysis, combining institutional, financial, and risk-based components, as well as in the formalization of the causal relationship «risk allocation→NPV→Value for Money».