Trust and management control systems in PPPs

Since the 1980s, Private Public Partnerships (PPPs) has been promoted to sustain the growing needs of public sector investments, while producing value for money. Scholars studied PPPs in different guise and perspective to assess their nature, rationale, and benefits. Less attention has been paid to aspects regarding the internal functioning of the PPPs, including how management control systems (MCS) are employed. In PPPs, particular attention was paid to the “trust”, which influences the relationships between partners involved, conditions the type of information requested, and the MCSs adopted. Nevertheless, research about how MCS and inter-party trust practices are employed in PPPs remains in its infancy. The aim of this paper is to contribute to the debate through the development and testing of a conceptual archetype to explain the relationship between trust and MCS in PPPs. The archetype developed proposes different MCS, bureaucracy and trust-based pattern, in relation to the level of programmability of task and risk definition. Trust takes on different configurations depending on the type of MCS used. The paper adopts case study methodology conducted in a hospital build and operated under a project finance deal. Results highlight how different patterns of MCS can be combined to govern PPPs.