Purpose

In the context of public-private partnerships (PPPs), it has been argued that the standard valuation framework produces a paradox whereby government appears to be made better off by taking on more systematic risk. This has led to a range of approaches being applied in practice, none of which are consistent with the standard valuation approach. The purpose of this paper is to demonstrate that these approaches are flawed and unnecessary.

Design/methodology/approach

The authors step through the proposed alternative valuation approaches and demonstrate their inconsistencies and illogical outcomes, using theory, logic and mathematical proof.

Findings

In this paper, the authors demonstrate that the proposed (alternative) approaches suffer from internal inconsistencies and produce illogical outcomes in some cases. The authors also show that there is no problem with the current accepted theory and that the apparent paradox is not the result of a deficiency in the current theory but is rather caused by its misapplication in practice. In particular, the authors show that the systematic risk of cash flows is frequently mis-estimated, and the correction of this error solves the apparent paradox.

Practical implications

Over the past 20 years, PPP activity around the globe amounts to many billions of dollars. Decisions on major infrastructure funding are of enormous social and economic importance.

Originality/value

To the best of the authors’ knowledge, this study is the first to demonstrate the flaws and internal inconsistencies with proposed valuation framework alternatives for the purposes of evaluating PPPs.

中文翻译：

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公私合作估值悖论

目的

在公私伙伴关系 (PPP) 的背景下，有人认为标准估值框架产生了一个悖论，即政府似乎通过承担更多系统性风险而变得更好。这导致在实践中应用了一系列方法，但没有一种方法与标准估值方法一致。本文的目的是证明这些方法是有缺陷的和不必要的。

设计/方法/方法

作者使用理论、逻辑和数学证明逐步完成了提议的替代估值方法，并证明了它们的不一致和不合逻辑的结果。

发现

在本文中，作者证明了所提出的（替代）方法存在内部不一致问题，并且在某些情况下会产生不合逻辑的结果。作者还表明，当前公认的理论没有问题，明显的悖论不是当前理论存在缺陷的结果，而是由于其在实践中的误用所致。特别是，作者表明现金流的系统性风险经常被错误估计，而纠正这种错误可以解决明显的悖论。

实际影响

在过去的 20 年中，全球范围内的 PPP 活动总额达数十亿美元。重大基础设施融资决策具有巨大的社会和经济意义。

原创性/价值

据作者所知，本研究首次证明了用于评估 PPP 的拟议估值框架替代方案的缺陷和内部不一致。