# The impact of legal details in public-private partnerships How legal flexibility shapes private investments in infrastructure - **Source:** [Strategic Management Journal](https://onlinelibrary.wiley.com/journal/10970266) - **Published:** 2026-07-24 - **Original article:** - **On Brifing:** https://brifing.si/s/9cabbe9e-cbdd-4646-915d-7f8278349c53 ## Legal Design in Public-Private Partnerships The research examines how the level of detail in public-private partnership (PPP) laws affects project flexibility. Highly detailed laws restrict government decision-making, while less detailed ones offer more contractual flexibility. This is particularly crucial for user-pay projects where market responsiveness is key. ## Legal Detail and Compliance Costs The study shows that highly detailed laws increase compliance costs, making user-pay projects less attractive. Private sector prefers flexible contract structures in projects where they bear demand risk, as they need to adapt quickly to market conditions. ## Political Constraints and Legal Design The research reveals that countries with weaker political constraints enact more detailed PPP laws. This suggests that legal frameworks compensate for weak institutional checks, serving as a confidence-building measure for investors. ## Dynamics of User-Pay Projects Analyzing 3986 PPP projects across 53 countries, the study finds that less detailed laws are associated with more user-pay arrangements. Private sector prioritizes contract flexibility in projects where revenues come directly from users. ## Diversity of Investment Models The balance between legal certainty and flexibility directly impacts the diversity of investment models. Detailed laws protect private investments while potentially narrowing the range of viable project structures, offering important insights for policymakers. ## Implications for Policymakers The research highlights that PPP legal design not only boosts investor confidence but also shapes project structures. Policymakers can attract more private investment and diversify infrastructure projects by balancing legal detail with contractual flexibility. ## Sources covering this story - https://sms.onlinelibrary.wiley.com/doi/10.1002/smj.70111?af=R — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._