52
www.amazoniainvestiga.info ISSN 2322- 6307
DOI: https://doi.org/10.34069/AI/2021.45.09.5
How to Cite:
Marysyuk, K.B., Komnatnyi, S.O., Grygor`yeva, V.V., Prystai, T.M., & Mital, O.H. (2021). Public-private partnership as a new
form of social responsibility and a mechanism of decentralization of public administration. Amazonia Investiga, 10(45), 52-62.
https://doi.org/10.34069/AI/2021.45.09.5
Public-private partnership as a new form of social responsibility and a
mechanism of decentralization of public administration
Державно-партнерські відносини як нова форма соціальної відповідальності та
механізм децентралізації державного управління
Received: August 17, 2021 Accepted: September 25, 2021
Written by:
Kostyantyn B. Marysyuk
14
https://orcid.org/0000-0002-7483-3836
Serhii O. Komnatnyi
15
https://orcid.org/0000-0002-2124-2047
Viktoriya V. Grygor`yeva
16
https://orcid.org/0000-0002-4997-803X
Tatiana M. Prystai
17
https://orcid.org/0000-0001-6180-2785
Olena H. Mital
18
https://orcid.org/0000-0002-4101-3081
Abstract
Анотація
Потреби в залученні ресурсів у соціально
важливі інфраструктурні об’єкти,
децентралізації функцій управління, ринковій
орієнтації публічних служб, результативності та
конкуренції вимагає пошуку поєднання
можливостей співпраці державного та
приватного сектору. Одним із сучасних підходів
до реалізації соціально важливих проектів стало
державно-приватне партнерство. У дослідженні
було визначено ступінь впливу партнерства
держави та бізнесу, як механізму
децентралізації державного управління, на
фактори соціальної відповідальності. В якості
методологічного підходу використано аналіз
змісту існуючих досліджень соціальної
відповідальності державно-приватного
партнерства шляхом виявлення та порівняння
ключових чинників соціальної
відповідальності; визначення змінних, які їх
характеризують, та проведення
економетричного аналізу встановлених змінних
величин. Доведено, що крім подолання
дефіциту бюджету, створення економічних
14
Doctor of Law, Professor at the Department of Criminal Law and Procedure, Institute of Jurisprudence, Psychology and Innovative
Education, Lviv Polytechnic National University, Lviv, Ukraine.
15
PhD in Pedagogy, Senior Lecturer of Department of Civil Law Disciplines, National Academy of Internal Affairs, Kyiv, Ukraine.
16
PhD in Law, Associate Professor at the Donetsk State University of Management, Department of Special Law Disciplines, Faculty
of Law and Public Administration, Donetsk State University of Management, Mariupol, Ukraine.
17
PhD in Law, Associate Professor at the Department of State Legal and Branch Legal Disciplines, Kyiv University of Law of NAS
of Ukraine, Kyiv, Ukraine.
18
PhD in Economy, Associate Professor at the Department of Hospitality Industry and Sustainable Development, V.I. Vernadsky
Taurida National University, Kyiv, Ukraine.
Marysyuk, K.B., Komnatnyi, S.O., Grygor`yeva, V.V., Prystai, T.M., Mital, O.H. / Volume 10 - Issue 45: 52-62 / September, 2021
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private partnership involves social responsibility.
The activity of public-private partnerships
(private investment in infrastructure projects) is
found to have impact on innovation, the
environment, health care, the rule of law, and
unemployment rates. There is a need to conduct
further research with an expanded number of
countries and factors that describe social
responsibility of public-private partnership.
результатів діяльності, державно-приватне
партнерство може нести соціальну
відповідальність. Виявлено, що результати
діяльності державно-приватного партнерства
(приватні інвестиції в інфраструктурні проєкти)
мають певний вплив на інновації, екологію,
охорону здоров’я, показники верховенства
закону, зниження безробіття. В подальшому є
необхідність проведення досліджень з
розширеною кількістю країн та чинників, які
характеризують соціальну відповідальність
державно-приватного партнерства.
Ключові слова: децентралізація управління,
державно-приватне партнерство, соціальна
відповідальність, держава.
Introduction
The aim of the system of public administration is
to influence public relations within its functional
capabilities. Society development entails new
needs, requirements, values aimed at improving
the standard of living and its quality, improving
the indicators associated with human life.
Reforms in the public administration system are
based on the processes of defining goals,
organization, changes in the structure of society,
combining the possibilities of public and private
property. Such mechanisms enhance joint
activities, increase efficiency, and provide the
necessary results for society.
Public administration relies on law enforcement
that allows implementing public issues, achieve
social goals and joint decision-making within the
authority of public institutions and disposal of
public property. In recent decades, public
administration has found innovative approaches
to strengthening its capabilities. One of these
areas is the decentralization of public
administration. State resources are not enough to
solve an increasing number of social problems.
As a result, hybrid forms of governance are
emerging that allow delegating some of the
state’s functions to those who can perform them
more effectively, namely — the private owner.
The aim of this study is to determine the degree
of influence of the partnership between
government and business, as a mechanism of
decentralization of public administration, on the
factors of social responsibility. The study is to
identify the features of public-private partnership
as a mechanism for decentralization of public
administration; analyse the definition of “social
responsibility”; identify factors of social
responsibility of PPP projects using existing
approaches and research; determine the degree of
dependence between private investment in PPP
projects and the factors of social responsibility
that have been established before.
Literary review
The concepts of the New Public Management
became the ideas of this approach, which is based
on minimizing the role of the state,
decentralization of management functions,
market orientation of public services,
contracting, efficiency, competition. The new
public management promoted public-private
partnerships (PPPs) as a tool that combines the
best benefits of public and private sectors in
providing infrastructure, thereby reducing the
financial burden on the state and achieving
efficiency in project implementation. Under the
New Public Management paradigm, the rule of
law, capacity and trust create an institutional
environment for the development of PPP projects
(Casady, Eriksson, Levitt & Scott, 2019).
Public-private partnership is seen as “a long-term
contract between a private party and public
authorities for the provision of public property or
services, in which the private party bears
significant risk and responsibility for
management, and the reward is performance-
based” (World Bank, 2019). PPPs are essentially
a collaboration between public and private actors
for mutual benefit (Sheppard & Beck, 2016).
The implementation of public services in the
course of public-private partnership has become
widespread in the world, as it has shifted the
emphasis of state dominance in the creation and
distribution of public services. The goal of the
PPP should be to increase the efficiency of the
use of public funds through competitive
management, sharing of risk and responsibility.
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In a situation of public finance shortage,
infrastructure depreciation, increasing
infrastructure deficits, and provided
requirements for achieving the UN Sustainable
Development Goals for infrastructure, countries
currently face problems of infrastructure
development (Mota & Moreira, 2015). Today,
the PPP model is used to meet the growing needs
for infrastructure in many countries (Malik &
Kaur, 2020).
In addition to reducing the fiscal burden of
countries, PPPs offer other benefits: attracting
private funds, save money and time, helping to
achieve better value for money and ensuring
proper risk allocation (Rocca, 2017). PPP
agreements provide for cooperation as well as
distribution of responsibilities, and the main goal
is to accumulate resources to build infrastructure.
PPPs can be used to finance infrastructure in the
“energy sector, transport, information and
communication technologies, water supply and
sanitation, as well as the social sector” (Malik &
Kaur, 2020). Due to these benefits, they are
actively used to finance sustainable infrastructure
(Casady et al., 2019).
Innovative approaches in the adoption of new
technologies of public administration involve
decentralization of public administration, that is
reducing the boundaries of formation and
realization of public authority through partner
entities (business environment, non-
governmental institutions), as well as the
realization of common interests, which provides
for overcoming the negative consequences with
excessive management costs, bureaucracy,
centralization, etc. The logical evolutionary path
of public-private partnership should be the
introduction of mechanisms for the
decentralization of power based on the joint
implementation of state functions. This will
strengthen the possibilities of state regulation,
strengthen the development policy of various
sectors of the economy, providing tools for
public control. The proposed approaches will
increase macroeconomic stability, standards of
living, and social responsibility.
Although the economic factors produced by PPP
projects are determined as key and measurable,
the social component can be determined as
significant contribution of public-private
partnership. Implementation of PPP projects
produces social effects that can affect
unemployment, health care and other important
factors. Given the importance of PPP for society,
a necessary aspect of the study is the concept of
“social responsibility”. Social responsibility is
seen as a commitment of business to contribute
to sustainable economic development by
working with employees, the local community
and society as a whole to improve their lives in
ways that benefit business and development
(Popa, 2015). Social responsibility not only
promotes sustainable development and local
development, but also improves cooperation and
relationships between society and organizations.
PPP researchers focus on the economic results of
the partnership, and the study of social
responsibility is not widespread enough in
scientific literature. Today, social responsibility
interpreted as “a theoretical approach to social
and corporate governance, aimed at
implementing the widely supported concept of
‘economic growth for all’ and the gradual
overcoming of social inequality in modern
societies” (Mulej, O’Sullivan & Štrukelj, 2021,
p. 97). Social responsibility is a concept that
should be followed at the state level (social
responsibility of the state). Social responsibility
at the state level, also called social responsibility
of the state, is the ability of legislation of a
particular country “to ensure a high level of
social welfare, economic and environmental
sustainability, without further deepening of
income inequality and violation of human
(economic and social) rights” (Mulej, O’Sullivan
& Štrukelj, 2021, p. 35). Of the three foundations
of sustainability — economic, environmental and
social — it concerns only social sustainability.
Responsibility is realized through ethical
behaviour that promotes, among other things,
sustainable development, improved health care
and social well-being (Hinson, Avomyo, Kuada
& Asante, 2017).
The study of social responsibility factors in PPP
projects (Yu et al., 2018) identified 38 social
responsibility factors, which were further
analysed and classified according to various
aspects of responsibility. The most widely
reported factors of social responsibility in PPPs
are: “creating a system of environmental
management”, “innovation” and “ensuring
accountability, legality and transparency”. In
addition, factors related to healthcare, labour
protection and safety, human rights, and
providing jobs were identified. A similar list of
social responsibility factors developed in (Yu et
al., 2018) was taken as a basis for another study
(Osei-Kyei et al., 2019).
In addition, the study (Chen et al., 2019)
developed a model that can be used to assess the
levels of sustainability of PPP projects. Four
categories of social responsibility factors
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included in this model and they are: economic,
environmental, social and people-oriented
factors. Social factors received the highest
coefficient in the PPP resilience index equation.
This study identified factors related to PPP social
responsibility: innovation, environmental
management, ensuring accountability, legality
and transparency, healthcare, and human rights.
PPP projects have a significant impact on the
environment, citizens and society during their
long life cycle; thus, social responsibility became
critical in their development. As project
companies seek to make a sufficient profit, they
have to make significant efforts to propose social
measures and promote sustainable development
measures. In recent years, PPPs have used a
variety of social responsibility factors, and these
factors often focus on areas such as healthcare,
education, sanitation, and philanthropy (Yu et al.,
2018). Most of the social responsibility
initiatives often adopted under the PPP focus on
such areas as environmental protection,
sanitation, education and transparency (Patil,
Tharun & Laishram, 2016).
Methods
The methodological approach of the study will be
based on several stages: identification of key
factors of social responsibility in PPP projects
using existing approaches in modern research of
the said factors; identification of indicators that
can describe the established factors of social
responsibility and econometric analysis to
identify a significant set of factors.
Using the studies of social responsibility in
public-private partnership (Chen et al., 2019;
Osei-Kyei et al., 2019; Yu et al., 2018), the
following factors of social responsibility were
selected, which are important implications of
PPP projects: innovation, environmental
protection (ecology), healthcare, accountability
and legality (rule of law) and unemployment
reduction (providing jobs).
The number of PPP projects and PPP investments
as a percentage of GDP are considered as
important aspects of PPP activities (Yurdakul,
Kamaşak & Öztürk, 2021). The study focused on
the amount of investment in PPP projects. In
order to determine whether there is a dependence
between social responsibility factors and the
results of PPP development, we used the
following data as variables: the total amount of
investment in PPP projects (1990-2019), the
Global Health Security Index, Environmental
Performance Index, Global Innovation Index,
Rule of Law Index and Unemployment Rate. The
available complete data on these factors allowed
studying the indicators of 69 countries. Data are
taken from open sources from the World Bank,
the Private Participation in Infrastructure
Database, the Global Health Security Index, the
Environmental Performance Index, the Global
Innovation Index, and the Rule of Law Index
(Table 1).
Table 1.
Variables Summary.
Variable
Full description
Measuring
PPPI
The total amount of
private investment in
PPP projects (1990-
2019)
USD million (World Bank, 2019).
GHS
Global Health Security
2019
The Global Health Security Index measures countries’ security and health
capabilities for six categories and 34 indicators. All data are rated on a scale
from 0 to 100, where 100 is the best health care condition (Economist
Intelligence Unit, 2020).
EPI
Index, 2020 EPI rank
The Environmental Performance Index is an assessment of the state of the
environment and the viability of ecosystems around the world. Using 32
performance indicators for 11 problem categories, the index assesses 180
countries. Indicators are rated on a scale of 0–100, from worst to best
(Wendling et al., 2020)
GII
Global Innovation
Index 2020 rankings
The Global Innovation Index classifies innovation performance in more than
130 countries. Indicators are rated on a scale of 0-100, from worst to best
(Dutta, Lanvin, & Wunsch-Vincent, 2020).
RLI
Rule of Law Index
2020
The Rule of Law Index provides an assessment of the rule of law in 128
countries, providing ratings based on 8 factors. Indicators range from 0 to 1,
with 1 indicating the highest level of observance of the rule of law (World
Justice Project, 2020).
UNT
Unemployment rate
2020
Unemployment, total (% of total labour force) (ILO (International Labour
Organization) simulated estimate (World Bank, 2020).
Source: author’s development
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To determine the functional dependence of у =
ƒ(х1, х2,…хn) + ε of the resultant attribute (y),
namely the development of PPPI on factor
attributes (х1, х2, … хn), which are characterized
by indicators (GHS, EPI, GII, RLI, UNT) (Table
1), it is necessary to conduct a regression
analysis, which has a theoretical form:
Y = β0 + β
1
X
1
+ β
2
X
2
+ … + β
n
X
n
+ε
(1)
In equation (1) β0, β1, … βn are vectors of
dimension of unknown parameters, ε is a member
of a random error in equation. Functional
dependence calculations will be performed using
the Gretl software package.
Results
Based on the theoretical model, we build
equation (2), which is an econometric model that
determines the degree of dependence of the
development of PPP (the amount of private
investment) on the factors that describe social
responsibility:
ln PPPI = β
0
+β
1
ln GHS +β
2
ln EPI +β
3
ln GII+β
4
ln RLI+β
5
ln UNT +ε
(2)
where ln PPPI, ln GHS, ln EPI, ln GII, ln RLI, ln
UNT – logarithms of values of the studied
indicators.
Using the Gretl software package, the proposed
model was evaluated using the least squares
method (LSM). The results of the model values
are given in Tables 2 and 3.
Table 2.
Model: OLS, Using Observations 1-69; Dependent Variable: l_PPPI
Coefficient
Std. Error
t-ratio
p-value
const
−13.7468
4.71647
−2.915
0.0049
***
l_GHS
2.66163
1.18327
2.249
0.0280
**
l_EPI
−1.70846
1.20144
−1.422
0.1600
l_GII
−4.26068
1.77431
−2.401
0.0193
**
l_RLI
4.43431
1.27343
3.482
0.0009
***
l_UNT
0.577544
0.319684
1.807
0.0756
*
Table 3.
The results of Values for the Model
Mean dependent var
8.433947
S.D. dependent var
2.052781
Sum squared resid
167.1605
S.E. of regression
1.628908
R-squared
0.416636
Adjusted R-squared
0.370337
F(6, 62)
8.998869
P-value(F)
1.71e-06
Log-likelihood
−128.4340
Akaike criterion
268.8680
Schwarz criterion
282.2727
Hannan-Quinn
274.1861
The results of testing the hypothesis of
insignificance of the coefficients are as follows:
The Global Health Security Index, the Global
Innovation Index, the Rule of Law Index and the
Unemployment Rate were significant. Moreover,
* means that the indicator is significant at the
level of p <0.1, ** — at the level of p <0.05, and
*** — at the level of p <0.01. The Environmental
Performance Index in this model is not
significant. The Global Innovation Index is
negative, indicating an inverse dependence: as
investment in PPPs increases, innovation
performance deteriorates.
Test results of tests for the normal distribution of
the model: Doornik-Hansen test = 3.2784, p-
value 0.194135; Shapiro-Wilk test W =
0.973755, p-value 0.154638; Lilliefors test =
0.096997, p-value = 0.11; Jarque-Bera test =
2.58503, p-value 0.274579. For these criteria at
the level of significance α = 0.05, the null
hypothesis about the normality of the distribution
of regression residuals is not rejected.
Let us check the normality of the distribution of
regression residuals based on the Chi-square
criterion. The frequency distribution for the
model is shown in Figure 1 and Table 4. Null
hypothesis — normal distribution: Chi-square
(2) = 3.278, p-value = 0.1941.
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Figure 1. Frequency Distribution for the Model, Observations 1-69
Table 4.
Frequency Distribution for the Model, Observations 1-69
Interval
Midpt
Frequency
Rel.
Cum.
< -3.4604
-3.9184
2
2.90%
2.90% *
-3.4604 - -2.5444
-3.0024
5
7.25%
10.14% **
-2.5444 - -1.6284
-2.0864
4
5.80%
15.94% **
-1.6284 - -0.71240
-1.1704
8
11.59%
27.54% ****
-0.71240 - 0.20359
-0.25440
13
18.84%
46.38% ******
0.20359 - 1.1196
0.66159
21
30.43%
76.81% **********
1.1196 - 2.0356
1.5776
11
15.94%
92.75% *****
2.0356 - 2.9516
2.4936
3
4.35%
97.10% *
>= 2.9516
3.4096
2
2.90%
100.00% *
Let us estimate the matrix of paired correlation
coefficients. It is believed that significant
correlation coefficients in absolute terms
exceeding 0.7-0.8 indicates multicollinearity.
The results of the evaluation of the correlation
matrix between the variables are shown in Table
5. As we see, the correlation coefficients exceed
the values of 0.7-0.8.
Table 5.
Correlation Coefficients, Observations 1 - 69. 5% Critical Values (Bilateral) = 0.2369 for n = 69
l_GHS
l_GII
l_RLI
l_UNT
l_EPI
1.0000
0.1864
0.6428
0.0237
0.3766
l_GHS
1.0000
0.4844
0.5087
0.4160
l_GII
1.0000
0.2719
0.6143
l_RLI
1.0000
0.4777
l_UNT
1.0000
l_EPI
Using data of two indicators (l_PPPI, l_RLI) for
69 countries with different levels of economic
development, it is possible to build a graphical
model that shows the relationship between
private investment in PPP and the Rule of Law
Index (Figure 2). The Rule of Law Index in the
presented model received the lowest P-value —
0.0009.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
-4 -2 0 2 4
Density
uhat1
relative frequency
N(-1.6734e-015,1.6289)
Test statistic for normality:
Chi-square(2) = 3.278 [0.1941]
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Figure 2. The Relationship between Private Investment in PPPs and the Rule of Law Index
The results obtained in the study require
additional explanations regarding their reliability
and comparison with similar approaches or
studies described in scientific literature.
Discussion
Analysis of the dependence of the factor that
indicates the level of PPP development in the
country (the amount of private investment in PPP
projects) on the factors that describe social
responsibility proves the importance of certain
indicators. Regarding the features of the study, it
should be noted that the available input data
(Global Health Security Index, Environmental
Performance Index, Global Innovation Index,
Rule of Law Index and Unemployment Rate)
were taken for 2019-2020 and do not take into
account data for past periods. Given the
incomplete set of data by countries for each of
the variables, it was not possible to fully consider
the countries, so we used data on 69 countries,
which are mostly low-level or developing
countries. The question arises on the need to
expand the data set for most countries in terms of
obtaining empirical data, which involves, first of
all, calculations for individual countries where
the relevant data are not available.
In addition, the considered factors of social
responsibility of PPP projects, obtained from
research (Chen et al., 2019; Osei-Kyei et al.,
2019; Yu et al., 2018) should be expanded in
future similar works, which may be an objective
for researchers of this issue.
The next limitation is the author’s selection of
indicators that can describe the social
responsibility factors identified in the study
(Global Health Security Index, Environmental
Performance Index, Global Innovation Index,
Rule of Law Index and Unemployment Rate). It
is advisable to use other indicators and expand
their range in subsequent studies.
In an increasingly globalized economy,
governments continue to transfer public service
management to private entities through public-
private partnerships, thus implementing
mechanisms for decentralizing public
administration. In the New Public Management
paradigm, PPPs are seen as a New Public
Management tool used by public sector bodies to
activate third parties to implement infrastructure
projects, organize and maintain relevant agent
networks throughout the project life cycle.
Although recent research has examined in detail
the main institutional factors contributing to the
successful development of PPPs, there have been
few attempts to “combine the conceptual
foundations of PPP institutional maturity
(legitimacy, trust and potential) with the broader
theoretical paradigm of the New Public
Management” (Joudyian et al., 2021, p. 7).
The PPP agreement requires each stakeholder to
take the initiative on certain issues, and therefore
PPP management should anticipate that the
leading role in the decentralization of
management shifts from one party to another
depending on changing situations and
circumstances. PPP agreements can last for many
years, and it is extremely important for partners
to trust each other, as this is the basis for their
willingness to negotiate at any time during the
term of the agreement to help each other. In
addition, as PPPs exist in a project management
environment, PPP arrangements require each
stakeholder to assume certain management
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functions within the decentralization of public
administration. Therefore, trust will help to
smooth the process of shifting leadership from
one party to another (Som, Omar, Ismail & Alias,
2020). Many governments begin to realize their
responsibilities and require companies which
implement projects that have a huge impact on
society to develop strategies and become
proactive to ensure sustainability and achieve the
Sustainable Development Goals (Aarseth et al.,
2017).
The main feature of social responsibility is the
company’s readiness to implement social aspects
in the decision-making process, to be responsible
for the consequences of their solutions on
society. The important measures in the social
sphere are labour protection and safety of their
employees, effective employment policy,
training, employment of people with disabilities
in the labour market, the adoption of the principle
of equal opportunities (Mulej, O’Sullivan &
Štrukelj, 2021).
Social responsibility also influences the factors
that contribute to the quality of life, combining
these ideas with the concept of sustainable
development. Sustainable development is an idea
whose guiding principles should lead to an
improvement in the quality of life. Creating a
quality of life involves responsibility for the
results of activity, which should serve
stakeholders, not just business owners or
shareholders (Mulej, O’Sullivan & Štrukelj,
2021).
Social responsibility integrates social,
environmental and ethical human rights, as well
as consumer issues into the process (Reshma,
2017). Social responsibility is an important issue
of PPPs, as it has become a program of many
governments to promote sustainable
development that meets the needs of today
without compromising the ability of future
generations to meet their own needs (Patil &
Laishram, 2016). The concept of social
responsibility “has become important in PPP
projects because many past projects have not had
sufficient social benefits, such as employment
opportunities, reliable service delivery,
environmental protection, and accessibility”
(Osei-Kyei & Chan, 2016, p. 175).
The category of environment refers to the
conservation and management of resources, as
well as the promotion of environmental
protection at the project site (Bjärstig, 2017). The
study by Raza Shah and Yousufi (2021) shows
that investment in particular PPP projects
degrades the ecological parameters of the
environment. At the same time, there are studies
proving the positive impact of PPP on the
ecological condition (Pan, Chen, Zhou & Kong,
2020). Thus, it is still difficult to find
unambiguous convincing arguments in the
existing scientific literature about the direct
relationship between the development of PPP
and the ecological condition. This dependence is
traced in some projects, while in others we have
an adverse data. The results of the study confirm
the thesis that there may be no clear link between
investment in PPPs and the ecological condition.
The high level of institutional quality reflected in
the country’s regulatory framework, ensures that
PPP projects make optimal use of available
resources and work efficiently (Deep, Kim &
Lee, 2019). Transparency increases public
confidence in civil servants and improves the
overall positive perception of social
responsibility arrangements under PPP projects
(Osei-Kyei & Chan 2017). Ensuring
transparency and the fight against corruption is
crucial to gaining a positive perception of PPPs
by the general public (Osei-Kyei, Chan, Javed &
Ameyaw, 2017).
Important success factors for PPPs include
regulation, transparency, clear political
leadership, the right to vote and accountability,
government efficiency, and the fight against
governance-related corruption (Pérez-D'Oleo et
al., 2015). Countries that have improved the
quality of regulation and anti-corruption policies
may gradually attract more investment in PPPs.
Adequate legal framework reduces management
uncertainty for PPPs (Fleta-Asín, Munoz &
Rosell-Martınez, 2020). The study confirmed the
highest dependence between investing in PPPs
and indicators that describe the rule of law.
Although such studies as Carbonara and
Pellegrino (2020) note that PPPs cannot be
considered a panacea for innovation, there is
growing support for research into the links
between the sustainability of innovation in PPPs
(Ma et al., 2019). It is necessary to dwell on the
result obtained in the study that investment in
PPPs has a reverse effect on innovation. This
may indicate a shortage of funds, and PPP
funding provides only a standard approach to
project implementation. The development of
innovations requires constant R&D funding, and
in a situation of resource shortage this leads to a
choice — by increasing the funding of PPP
projects, innovation development will
experience a funding gap. Diyamett and
Diyamett (2019) present a similar understanding
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of the situation. Roumboutsos and Saussier
(2014) showed that investment in innovation is
directed at those areas that have a direct impact
on the benefit of the private party, mainly by
reducing operating costs and maintenance costs.
Thus, it is possible to assume that innovation
processes are intensified in the case of
redistribution of funds by reducing funding of
PPP projects.
The Global Health Security Index assesses the
security and capabilities of countries in the health
sector. There is a positive correlation between
data on the level of health care and the
development of PPP, which is confirmed by PPP
research in the health care system (Joudyian et
al., 2021).
The researchers Kruhlov and Tereshchenko
(2019) identified positive impact of PPP
development on job creation. As a result of the
creation of more jobs over long periods of
development, unemployment should
theoretically decrease. The expected result of the
study is that PPP is a catalyst for job creation
through active infrastructure projects (Matsolo,
2018), and the results of PPP projects reduce
unemployment (Geraghty, 2018), as
demonstrated by the results of our study.
As we can see, the processes of decentralization
of public administration, implemented in the
course of public-private partnership, not only
have a positive impact on economic indicators,
but also can produce social results using social
responsibility approaches. The study identified a
relationship between investment in PPP
development and social responsibility factors
(innovation, environment, health, rule of law and
unemployment reduction), which were
characterized by the following indicators: The
Global Health Security Index, the Environmental
Performance Index, the Global Innovation Index,
the Rule of Law Index and the Unemployment
Rate. But this approach requires further
elaboration of the results of the study of social
responsibility under public-private partnership.
Conclusions
Thus, when implementing PPP projects, the state
mainly tries to solve the economic issues,
namely: attract the necessary resources, create
modern infrastructure, implement sustainable
development goals. The public-private
partnership relies on the approach that involves
reducing public impact, changing the emphasis
of public administration by decentralizing
powers between the parties to economic and legal
relations. Most research on public-private
partnerships looks at the private sector as
partners in the supply of services and participants
in infrastructure construction.
This approach limits the opportunities for the
private sector in public administration. The
transfer by the state to private partners of rights
(property, resources, finances) and powers
(profit, risks) should additionally take into
account models that expand the functions of the
state - administration, control, regulation.
The study proves the need to consider indicators
of social responsibility in the course of public-
private partnership. It was identified that
important factors of social responsibility are
innovation, environmental protection, health,
accountability and legality, and unemployment
reduction. Econometric analysis of the factors
used as indicators of social responsibility showed
some dependencies: a significant correlation
between the development of PPP and the rule of
law, as well as the inverse correlation between
private investment in PPP and innovation. The
results of the analysis prove the relevant effects
of PPP activities, but the features of such effects
may be related to lack of funds, reduction of
operating costs, the specifics of infrastructure
projects, and other factors. In the future, the state
policy of PPP development as a mechanism of
decentralization of power in the governance
system should focus on further deepening the
opportunities for social responsibility, which
play an important role in achieving the
Sustainable Development Goals, improving
quality of life and solving many socially
important issues.
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