Controlling opportunism in partnerships: a process view

Controlling partner opportunism in public-private partnership (PPP) requires effective adaptation of governance mechanisms over life-cycle. This paper proposes a process framework of effective governance adaptation for controlling partner opportunism in case of PPP.

Using in-depth interview data and extensive secondary data, a comparative case analysis of governance adaptation for controlling partner opportunism in two provinces in the “National Health Insurance Program” in India was conducted. The study uses contextual analysis and critical incident technique to identify the opportunistic behaviors and use processing tracing to map the adaptation of governance mechanisms for effective control of partner opportunism.

The paper makes several propositions and proposes a three-stage framework for effective governance adaptation for controlling partner opportunism. The study proposes that governance adaptation begins with the iterative process of discovering governance needs, followed by the dynamic interaction between governance mechanisms shaping the adaptation process. The process ends with two-dimensional alignment–alignment of partner's goal and alignment of governance mix with governance needs resulting in effective governance.

The paper contributes to the existing debates on governance mix and its effectiveness in PPP by proposing two-dimensional alignment for optimal governance adaptation leading to effective PPP governance.

Existing research presents contradictory findings about the effectiveness of governance mechanisms to control partner opportunism. The proposed process-view of governance adaptations tries to address this conundrum to some extent.