PUBLIC PRIVATE PARTNERSHIP AS A NON-FISCAL INSTRUMENT OF FINANCING THE PUBLIC INTERESTS

The financing of the public interests through public private partnership has lately become a rather popular theme, both in Croatia and abroad. One of the basic characteristics of public private partnership is that it is a non-fiscal instrument of financing public needs. In the first part of the paper the authors define non fiscal financing instruments as well as the concept and development of public private partnership. Since the term public private partnership today covers different forms of combination of public and private interests, the authors outline the most frequent typologies of association used in Great Britain (the fatherlando of public private partnership), and the United States. Analysing the advantages and the disadvantages of this financing instrument, the authors pay special attention to its political aspects, which the opponents consider to be one of its major shortcomings. They also deal with the issues of risk assessment and evaluation in the process of negotiating public private partnerships, which they believe to be the core of public-private relations. In the final part of the paper, the authors analyse the EU Directives for successful implementation of public private partnerships, stressing that many Member States and candidate countries have conducted reforms of their legislations in order to be able to use the instrument of PPP. The Guidelines of the Croatian Government and the necessary institutional and legislative support for a more intensive use of this instrument are also analysed. The authors believe that it is necessary to establish a special body that would deal with the problems of public private partnership (e.g., preparation of legislative regulation; creation of a uniform methodology for the implementation of PPP; approval of the PPP projects). They also suggest that we should not forget other forms of financing the public interests by including private capital and financial markets into the process, since the limited and insufficient budget funds cannot be efficiently replaced with only one instrument of on-fiscal financing.