The British Model of Private Finance Initiative and Public-Private Partnership Ten Years Later

Abstract

A decade ago, the U.K. government launched its so-called private finance initiative (PFI) to bring private equipment, services, and financing into public services. The definition of the term was later broadened to include public-private partnerships (PPPs). Although this type of program has been implemented elsewhere only to a limited extent, there are now growing signs of interest in several other countries in the European Union and Latin America. This article assesses the current status of PFI/PPP financing techniques in the defense sector. Through increased involvement of the private sector in providing quasi-military services such as air transport, governments can ensure that necessary resources are provided for the most important strategic military objectives when their budgets are constrained.