The article offers effective strategic planning to determine the prospects and future overall state of implementation of public-private partnership (PPP) projects in foreign economic activity. It consists of some elements of game theory and stages related to a) designing a matrix model of cooperation among PPP actors in foreign economic activity (including basic PPP models and strategies for cooperation among its actors), b) evaluating the probability of implementing the PPP model in foreign economic activity, c) calculating the Hurwicz criterion, the reliability coefficient, d) selecting an optimal way of cooperation among PPP actors in foreign economic activity based on corresponding criteria, e) summarizing game theory outcomes. Its use in conjunction with applied intelligent systems has ensured mutually beneficial cooperation in foreign economic activity on a long-term basis and attracted investments in the most promising infrastructure projects in need of creation, restoration, modernization, reconstruction and development in the amalgamated territorial community (ATC) of Davydiv.
Currently, the development of the world economy and international economic relations lies in the convergence of the economies of different countries, the modernization of production and technology and the promotion of an information society. In turn, these processes accelerate the development of forms of international economic relations and foreign trade and strengthen globalization processes. In these conditions, however, one can observe the escalation of economic and social problems, as well as a notable shift in priorities from the development of economic systems to the solution of these problems.
Since the mechanism of public-private partnership (PPP) has proven its efficiency in various forms of economic activity, one can use it to solve the above-mentioned problems and create a strong foundation for cooperation between the state and business. Significant potential for its development lies in the foreign economic sphere, which requires timely attention to the issues of PPP strategic planning in foreign economic activity and the use of optimal models of cooperation in the form of PPP in foreign economic activity.
As is known, one can increase the efficiency of PPP projects through intelligent systems and technologies, decision-making processes and information management practices. Special emphasis should be placed on applied intelligent systems.
Numerous researchers have explored the issue of strategic planning and assessment of publicprivate partnership (Bondar N. M., Filippova V. D., Budnyk V. A., Mykhailiv H. V., Hryniv L. V., Los O. I., Berrone P., Ricart J. E., Duch A. I., Bernardo V., Salvador J., Piedra Peña J., Rodríguez Planas M., Lernichenko K. V., Spoann V., Fujiwara T., Seng B., Lay C., Yim M., et al.). They identify the main vectors of PPP efficiency and methods for its assessment and justify the principles and peculiarities of PPP assessment in foreign economic activity. It is essential to analyze them more in detail.
As noted by Spoann V., Fujiwara T., Seng B., Lay C., Yim M., a public-private partnership
develops performance of the public sector, including reducing costs, improving efficiency and
ensuring environmental protection [
Berrone P., Ricart J. E., Duch A. I., Bernardo V., Salvador J., Piedra Peña J., Rodríguez Planas M.
believe that «most of the current theoretical approaches and evaluation tools to measure the impact of
PPPs are primarily focused on the economic dimensions or economic implications of PPP projects»
[
As noted by Osei-Kyei R., Chan A. P., Yu Y., Chen C., Ke Y., Tijani B in [
In addition to the above-mentioned recommendations [
According to the European Bank for Reconstruction and Development (EBRD) and Economist
Intelligent Unit (EIU), a country’s ability to create and implement PPP projects can be measured by
calculating the readiness index. This index provides a comparison of countries based on six criteria
(regulatory and legal framework, institutional structure, operational readiness (functional readiness),
investment climate, financial mechanisms, sub-national (regional-municipal) corrective index), using
19 quantitative and qualitative indexes [
Liang Y., Jia H. claims that project efficiency is possible in the presence of revenues higher than
expenses incurred. At the same time, the benefits of PPP projects for various stakeholders should be
taken into account. The researcher analyzes key factors for PPP success: «benefits to private partner»,
«benefits to public partner», «benefits to end user», «what is a better service», «meeting design
goals», «meeting planning goals», «the delivery time to end user», etc. [
To assess PPP projects Tajani F., Morano P., Di Liddo F., Locurcio M. propose to use economic
assessment tools and calculate the net present value (NPV), the internal rate of return (IRR) and the
discounted payback period (DPP) [
This corresponds to «Methods of Analyzing Public-Private Partnership Efficiency», approved by
Order of the Ministry of Economic Development and Trade of Ukraine No 255 dated February 27,
2012. In particular, Order of the Ministry of Economic Development and Trade of Ukraine No 1735
as of November 29, 2017 stipulates the procedure for calculating economic and financial indexes of
public-private partnership implementation (NPV, IRR, PI, DPP for both the project as a whole and
interested parties) [
Following the above-mentioned Order No 255, Filippova V. D., Budnyk V. A., Mykhailiv H. V.,
Hryniv L. V. and Los O. I. recommends determining the internal value of PPP projects from the
perspectives of the state and the private partner to align the interests of actors in PPP projects [
In their turn, V. A. Budnik & K. V. Lernichenko offer a methodical approach to assessing the
efficiency and development of urban water transport enterprises (UWTE) [
Despite significant interest in the issues of assessment and strategic planning of PPP in foreign economic activity, applied intelligent systems (AIS) still have not been widely applied in this process. Most successful PPP projects are aimed at introducing the achievements of artificial intelligence (AI) into the activities of cities and communities. They include e-governance projects, automated driving technologies, intelligent transport systems (telecommunications and information infrastructure, subsystem tolls, transport operating centres, subsystem video surveillance cameras hotspots, emergency call subsystem, weighing subsystem), Intelligent Vehicles [12-17].
When speaking about the use of AIS in implementing PPP projects in foreign economic activity, one can mention the following. Applying the Leximancer software, Tingting Liu, Sherif Mostafa, Sherif Mohamed & Tuan Son Nguyen analyzed and grouped available publications on the issue of identifying innovations in PPP projects on smart city construction [18]. Multi-Attribute Utility Analysis (MAUA) was conducted by P. T. I. Lama & W. Yan to analyze the costs of PPP projects on smart city construction and the results of their implementation [19].
Neurofuzzy decision support system (NFDSS) is described and analyzed by Jin & Xiao-Hua. By combining fuzzy and neural network techniques, a synthesized fuzzy inference system was established and taken as the core component of the NFDSS. The scope of using the recommended system lies in the field of selecting risk management strategies when implementing PPP projects in foreign economic activity [20].
A. Sharafi, H. Iranmanesh, M. S. Amalnick & M. Abdollahzade applied Local Linear Neuro Fuzzy and Multi-Layer Perceptron methods to forecast the stochastic variables in the course of financial assessment of PPP projects. In addition, a fuzzy multi-objective model is proposed to identify the most feasible and satisfactory solution [21].
The mean impact value (MIV) method and the back-propagation (BP) feed-forward neural network improved by the sparrow search algorithm (SSA) are used by S. Wang, J. Fang, L. Liu & H. Wu to predict ticket prices for a public-private partnership (PPP) subway system [22].
Thus, it is important to highlight the significant potential of using AIS to solve management problems in PPP projects, which indicates their expediency in the strategic planning of PPP in foreign economic activity.
Special emphasis should be placed on ideas on the use of game theory elements in assessing PPP in foreign economic activity. Previously, V. M. Yuritsyn employed game theory (a prisoner’s dilemma) to model the cooperation between customs agencies and businesses. In particular, the researcher offered an objective model for optimizing such cooperation and systematized its possible scenarios through mathematical models: a matrix model of cooperation between customs agencies and businesses; a bi-matrix model of cooperation between customs agencies and businesses. These models rely on game theory (a prisoner’s dilemma), allowing one to determine the state of cooperation between customs agencies and businesses and discover ways of optimizing it. Finally, V. M. Yuritsyn confirmed the possibility of increasing its efficiency through public-private partnership [23].
This article shows how one can use theoretical game-based modelling and apply some elements of the playing with nature” game, described at [24], to assess PPP in foreign economic activity. According to the rules of the game, its players do not oppose each other as one acts consciously and the other makes moves randomly without a clearly defined strategy [25].
At the same time, it was decided to use the game during decision-making regarding PPP in foreign economic activity. According to the commonly accepted PPP classification, the following are presented as the elements of a matrix model of cooperation among PPP actors in foreign economic activity: А1 – cooperation between the state and business structures the actors in the economic activity of Ukraine and the foreign actors in economic activity; А2 − cooperation between the state and business structures the actors in the economic activity of Ukraine with foreign states); А3 − cooperation between the state and business structures the actors in the economic activity of Ukraine.
It is possible to implement basic models of PPP in foreign economic activity in each of the cooperation options (A1-A3 elements of matrix models): 1 − management agreement; 2 − leasing; 3 − concession; 4 − agreements on the creation or reconstruction of objects; 5 − sale of assets.
They are also included in the matrix of cooperation among PPP actors in foreign economic activity (see Table 1). The net present value (NPV) has been selected as the resulting index designed to assess PPP in foreign economic activity following “Methods of Analyzing Public-Private Partnership Efficiency”, approved by Order of the Ministry of Economic Development and Trade of Ukraine No 255 as of February 27, 2012. After calculating the values of the matrix’s indexes, the following is in order.
The procedure below can be used to assess PPP models in foreign economic activity depending on the nature of cooperation among PPP actors (A1-A3 elements of matrix models) [24]: 1. Assessing the probability of implementing the PPP model in foreign economic activity; 2. Calculating the Hurwicz criterion, the reliability coefficient. The Hurwicz criterion can be estimated by an expert in the range [0;1], where 0 corresponds to extreme pessimism [26].
The reliability coefficient ( ) can be calculated with the following formula:
= ∑ =1 × , where Р – the probability that the source contains 100% reliable information; n – the number of information sources. К – the reliability weight of the information source;
For sources containing 100% reliable information, the reliability weight is equal to 1; 50% reliable information 0.5; unreliable (0%) information 0. The reliability weight of information sources can be determined based on objective data on the responsibility for the truthfulness of the object (actor) that led to the appearance of this information or by an expert [27, 28].
3. Selecting optimal cooperation among PPP actors in foreign economic activity following the Bayesian information criterion (BIC), the Laplace criterion (LC), the Wald’s maximum criterion (WMC), the Hurwicz criterion (HC), the Hodges-Lehmann estimator (HLE) and the Savage’s minimax regret criterion (SMRC). Below they are analyzed more in detail:
The maximum value of the Bayesian information criterion (BIC) is considered as optimal.
The Laplace criterion (LC) means calculating the average value of the elements of each row using the following formula: each row using the formula below: criterion. following formula: = ∑5=1
× , = 1 ∑5 5
=1 , = min1> <5 , =
× +(1 − ) min1> <5 , The maximum value of the Laplace criterion (LC) is considered as optimal.
To calculate the Wald’s maximum criterion (WMC), one should calculate the minimum element in (1) (2) (3) (4) (5) (6) (7) To select an optimal strategy, it is advisable to calculate the maximum value under the given The Hurwicz criterion (HC). For each row, one calculates the value of the criterion using the = × min1> <5 + (1 − ) max1> <5 , where С – a coefficient of pessimism.
According to this criterion, one also considers the maximum value as optimal.
The Hodges-Lehmann estimator (HLE) allows a calculation for each row under the formula below: where U – the reliability coefficient.
The optimal value of the Hodges-Lehmann estimator (HLE) also corresponds to the maximum of the obtained values.
The Savage’s
minimax regret criterion (SMRC) involves calculating the risk matrix. It is recommended to fill in the matrix in columns (SMRC). In each column, one should calculate the maximum element, subtract all other elements of the column from it and record the results in the appropriate places according to the following formula: = max
− ,
According to , the maximum value should be chosen for each row of the risk matrix. The minimum value of the risk matrix ( ) should be considered as optimal in this case.
It is crucial to apply different criteria when using game theory in linear programming problems. This allows one to make a justified decision on the strategy of cooperation among PPP actors in foreign economic activity. Providing that the results of using these criteria are consistent, the choice of strategy is indeed obvious. Otherwise, one should obtain additional information about the environment, rely on the criterion more suitable for this situation, or use additional assessment criteria [29, 30].
4. Summarizing the results of game theory, selecting the strategy of cooperation among PPP actors in foreign economic activity and making managerial decisions.
It is possible to simplify most stages of the recommended sequence by using appropriate online algorithms and software products. During its practical validation, the authors of this article relied on automated calculations performed with Microsoft Excel. A ready software solution for solving game theory problems in strategic planning of PPP in foreign economic activity still has not been found.
Stages of recommended order to assess the prospects of cooperation among PPP actors in foreign economic activity summarized on figure 1.
Designing a matrix model of cooperation among PPP actors in foreign economic
activity Assessing the probability of implementing the PPP model in foreign economic activity
Calculating the Hurwicz criterion, the reliability coefficient Selecting optimal cooperation among PPP actors in foreign economic activity following the Bayesian information criterion (BIC), the Laplace criterion (LC), the Wald’s maximum criterion (WMC), the Hurwicz criterion (HC), the Hodges-Lehmann estimator (HLE) and the Savage’s minimax regret criterion (SMRC).
Summarizing the results of game theory, selecting the strategy of cooperation among
PPP actors in foreign economic activity and making managerial decisions
This article follows the recommended order to assess the prospects of cooperation among PPP actors in foreign economic activity as part of implementation of the public-private partnership project on “Capital Repair of Roads on Heroiv UPA St. (from Secondary School of Levels 1-2 to the church) in Horodyslavychi village of Lviv District in Lviv Oblast” involving Davydiv Village Council of Lviv District in Lviv Oblast and Onur Construction International LLC under the agreement No T-18/21 as of November 30, 2021.
It was decided to organize an expert group from the amalgamated territorial community (ATC) of Davydiv and Onur Construction International LLC to create a matrix of cooperation among PPP actors in foreign economic activity and assess information reliability. This group included employees of economic and legal departments of ATC Davydiv and those of Onur Construction International LLC.
Consequently, the following matrix has been designed (see Table 2), U =0.8, С =0.6.
The article explores applied intelligent systems and analyzes the ways of using them in the implementation of PPP projects in foreign economic activity. To make justified decisions concerning PPP in foreign economic activity, it was decided to use some elements of game theory (the «playing with nature» game) and follow a relevant procedure of economic assessment based on automated calculations with Microsoft Excel. Importantly, this procedure can be improved using online algorithms. It involves the following stages: 1. Designing a matrix model of cooperation among PPP actors in foreign economic activity (including basic PPP models and strategies for cooperation among its actors), whose resulting index is the NPV of PPP projects; 2. Evaluating the probability of implementing the PPP model in foreign economic activity; 3. Calculating the Hurwicz criterion, the reliability coefficient; 4. Selecting optimal cooperation among PPP actors in foreign economic activity under the Bayesian information criterion (BIC), the Laplace criterion (LC), the Wald’s maximum criterion (WMC), the Hurwicz criterion (HC), the Hodges-Lehmann estimator (HLE) and the Savage’s minimax regret criterion (SMRC); 5. Summarizing game theory outcomes, choosing a strategy of cooperation among PPP actors in foreign economic activity, making managerial decisions.
Using the offered strategic planning of PPP in foreign economic activity, one can determine prospects and future overall state of implementation of PPP projects in foreign economic activity by choosing those that ensure mutually beneficial cooperation in foreign economic activity on a longterm basis and attract investments in the most promising infrastructure projects in need of creation, restoration, modernization, reconstruction and development. It has been validated in Davydiv ATC as part of implementation of the PPP on «Capital Repair of Roads on Heroiv UPA St. (from Secondary School of Levels 1-2 to the church) in Horodyslavychi village of Lviv District in Lviv Oblast».
In further research on the problem, PPP strategies in foreign economic activity for real situations in different regions of Ukraine should be analyzed.
The recommended method should be used to strategize PPPs in foreign economic activity regarding reconstruction projects of infrastructural facilities in the post-war period in Ukraine, with the aim of increasing their effectiveness and quickly solving socio-economic problems. At the same time, potential sources of financing PPP projects in foreign economic activity in the post-war period should be taken into account, which should be used to rebuild critical infrastructure and maximize the benefits of all interested parties.
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