ABSTRACT

This chapter analyses the main relationships between businesses and governments and how they can be reframed to generate social impact. It discusses the evolving role of business in society and also analyses how this transition is carried out in practice, by mapping the instruments and organizational settings adopted by businesses. The chapter distinguishes between financial and non-financial instruments and traditional and innovative institutional settings. The institutional and value-related differences between public and private players have required "contractual enforcement", which remains a critical element because of the information asymmetry between public and private partners and the investment specificities. PPPs are the contractual form of public-private collaborations (PPCs). In a PPP, a public authority and a private sector company enter into a long-term contract, with the latter raising the finance required to design, build and operate new facilities.