Culturally and Politically Embedded Management Controls in Innovation Transitions of PPPs: Comparative Cases from a Developing Economy

We explore how culturally and politically embedded management controls influence innovation transitions of Public-Private Partnerships (PPPs) in a developing economy. The study relies on the cultural political economy perspective of management controls. Data were collected through in-depth interviews with senior executives from three knowledge-based PPPs operating in telecommunications, power and energy, and high-tech research industries in Sri Lanka. We demonstrate how cultural political economy factors (e.g., semiotic and cultural; political and institutional; economic and structural) have influenced Western-led, formal management controls across various PPP models (e.g., labour, leadership, innovation, operational, market, neoliberal and bureaucratic controls), both enabling and obstructing the shift towards the state’s professed ‘knowledge-based economy’ discourse. Management controls within telecommunications-based PPPs tend to be receptive to political interference, often supported by powerful, party-based trade unions, and primarily focus on innovation to cater to the local market. In contrast to traditional norms, both energy- and high-tech PPPs leverage management controls to resist political interference, promoting a strong, market-oriented approach to knowledge-driven innovation. PPPs with solid professional and managerial backgrounds are more likely to initiate innovation transitions through bottom-up approaches, whereas PPPs with considerable state and political influence tend to be predominantly driven by both top-down and bottom-up approaches. Nevertheless, evidence indicates a dialectical relationship between top-down and bottom-up approaches in all PPPs. Cultural political economy redefines the complex interplay among the state’s knowledge-based economy discourse, the innovation transition in PPPs, management controls, and development priorities as a co-evolving, politically negotiated process rather than a linear policy implementation. Our findings suggest that the success or failure of implementing a knowledge-based economy state project through PPPs depends not only on political policy priorities but also on the interaction of political power, professional leadership and management controls in practice.