ABSTRACT
Governments all over Europe are looking for new institutional arrangements to provide services for their citizens and to meet public interest. The term ‘third way’ is used by some politicians to indicate the direction in which these new arrangements are being explored. The word ‘third’ usually refers to finding a new way between two that already exist. In this instance, the two traditional ways are market production and government production. Production or provision of services financed entirely by government, common in the 1970s and 1980s, led to rising costs and even economic crisis. For that reason much more emphasis is now being placed on reducing budget deficits and governments controlling their budgets. At the same time there is social pressure to maintain an adequate, and sometimes even above adequate, level of public services. For this reason private involvement has increased, although a purely private production arrangement does not appear to satisfy social needs either. The third way, if we ignore the rhetoric and try to define it positively, can be understood as an attempt to combine the added value of governmental interference with the qualities of market-oriented parties. Public-private partnerships can be seen as the organizational manifestation of this idea.
