  This paper investigates the impact of Social Discount Rate (SDR) choice on
intergenerational equity issues caused by Public-Private Partnerships (PPPs)
projects. Indeed, more PPPs mean more debt being accumulated for future
generations leading to a fiscal deficit crisis. The paper draws on how the SDR
level taken today distributes societies on the Social Welfare Function (SWF).
This is done by answering two sub-questions: (i) What is the risk of PPPs debts
being off-balance sheet? (ii) How do public policies, based on the envisaged
SDR, position society within different ethical perspectives? The answers are
obtained from a discussion of the different SDRs (applied in the UK for
examples) according to the merits of the pertinent ethical theories, namely
libertarian, egalitarian, utilitarian and Rawlsian. We find that public
policymakers can manipulate the SDR to make PPPs looking like a better option
than the traditional financing form. However, this antagonises the Value for
Money principle. We also point out that public policy is not harmonised with
ethical theories. We find that at present (in the UK), the SDR is somewhere
between weighted utilitarian and Rawlsian societies in the trade-off curve.
Alas, our study finds no evidence that the (UK) government is using a
sophisticated system to keep pace with the accumulated off-balance sheet debts.
Thus, the exact prediction of the final state is hardly made because of the
uncertainty factor. We conclude that our study hopefully provides a good
analytical framework for policymakers in order to draw on the merits of ethical
theories before initiating public policies like PPPs.
