Political uncertainty in public-private partnership projects (PPPs): a flexible risk mitigation framework for Jordan's challenging landscape

Abstract

Aim and scope: this study provides an in-depth understanding of risks associated with the politically unstable region within the specific context of Jordan. By exploring the risk factors associated with the politically unstable region, this study aims to establish a flexible risk mitigation framework to help the PPP partners mitigate the impact of these risks. The previous literature discusses risks related to PPP projects primarily from two internal dimensions: risks arising from poor practices of PPP workers and risks arising from government actions, policies, and instability. Contrarily, the present study spotlights risks generated by the politically unstable region; it explores and identifies risks associated with the PPP projects from a managerial-political dimension and presents a flexible framework to mitigate these risks. Methodology: this study follows the qualitative methodology. The study is influenced by the ontological philosophy of constructivism and the interpretivist epistemological approach. The semi-structured interview mechanism is adapted for primary data collection, which is supported by multiple sources of secondary data. The interviews targeted Twenty-Three senior managers of project partners (public and private partners) in two case studies in Jordan. The thematic analysis method used in this study allows the interpretation of interviewees’ perceptions. The flexibility of this method suits the abductive approach of data analysis adopted in this study. Findings: The findings revealed significant knowledge gaps concerning the risks of the politically unstable region associated with the Jordanian unique context. The flexible framework of the current study identified several risk factors that affect PPPs in Jordan caused by the unstable politics in the region; these risks matched with practical risk mitigation strategies that increase PPP partners’ flexibility in mitigating the influence of the identified risks. The findings revealed the reserve account technique applied to mitigate the risk of delay in paying the private partner dues. Notably, the limited role of the public partner in managing and mitigating the consequences of the politically unstable region risks is also revealed. Limitations: risks of the politically unstable region associated with the PPP projects in the Jordanian context can evolve over time and differ in other contexts. This study, conducted at a specific time (operation phase), might not capture the full spectrum of risks that could emerge during the PPP projects’ lifecycle.