State, Market and Public Private Partnership Funds in Climate Finance: A New Institutionalist Analysis of State-Market Relations, Institutional Change and PPP-funds in Climate Finance

Emil Stigsgaard Fuglsang

Student thesis: Master thesis


The field of political economy offers many well-documented public and private responses to climate change, but Public Private Partnership funds (PPP-funds) are not one of them. With a promise to correct market errors, yield reasonable returns, attract institutional investors and thereby leverage public investments, PPP-funds offer a new and attractive way for public and private actors to coordinate efforts in climate finance. But with a new relationship comes new rules. This thesis therefore asks what type of state-market relationship in climate finance that PPP-funds represent? The study is designed as exploratory and in accordance to critical realism, and New Institutionalism is chosen as a theoretical framework. In order to circumvent the theory’s bias of explaining all aspects of phenomena in terms of existing institutional structures, an epistemological amendment is made. By including Streeck and Thelen’s theory of institutional change, the theoretical framework produces two frames for analysis. The first is devised for conceptualizing PPP-funds into New Institutionalist explanations while providing an atemporal account of state-market relations that PPP-funds can be seen to reflect. The second compares accounts of institutional change to the empirical evidence in order to consider the possibility that PPP-funds emerge in a context of changing state-market relations. The empirical evidence is produced by two case studies and an empirical account of the context for PPP-funds in climate finance. As New Institutionalism proves apt at delivering relevant insights on the empirical evidence, the study concludes that while market actors can be seen to dominate the state-market relations that PPP-funds emerge in, the situation changes if we account for change in the same relations. From this perspective, states emerge as entrepreneurial in the face of changing circumstances, why the conclusion that market actors dominate the state-market relations in climate finance that produce PPP-funds, seems to lack nuances. A final discussion reflects on the implications of this result for inquiries from other disciplines or analytical levels into PPP-funds.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2014
Number of pages106