A Stakeholder Governance Framework for Public–Private Partnerships

We advance stakeholder governance theory by theorizing how public–private partnerships (PPPs) can govern relationships with both contributing stakeholders (public and private partners) and legitimate but non-contributing stakeholders in order to create and more equitably distribute value. By integrating insights from stakeholder theory and PPP governance research, we develop a framework that distinguishes three categories of formal-relational mechanisms (i.e., participation and representation, joint integration, and monitoring and transparency). We theorize how these mechanisms mitigate three governance risks common in PPPs—cooperation failure, coordination failure, and opportunistic co-optation—that stem from goal misalignment, deficits in experience-based PPP capabilities, and power imbalances. We further argue that when risks co-occur, governance mechanisms can interact paradoxically. As a result, effective governance often requires portfolios of complementary mechanisms rather than single solutions. Our theory offers a meso-level account of how hybrid collaborations can sustain joint value creation while shaping more equitable value distribution, and contributes to both stakeholder theory and PPP governance research.