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Private and Public Financing of Infrastructure: Theory, International Experience and Policy Implications for Russia

Author

Listed:
  • Paul J.J. Welfens

    (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))

  • Ekaterina Markova

    (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))

Abstract

This paper analyses the needs in infrastructure investment and the problems and options for private and public financing of these investments in the transition countries, especially in Russia. Insufficient progress in infrastructure reforms in Russia and the low degree of private participation provide special incentives for the investigation of this topic. Inadequate development of the Russian bank sector and domestic capital markets worsen the options for the domestic financing of long-term infrastructure investments. Foreign investment is also low due to macro and micro instability, higher risks, legislative weaknesses, and institutional constraints. Public financing of infrastructure through Public Infrastructure Programs is a partial solution to the financing problems of infrastructure projects, yet it would be wise to include private and international financing as well. The experiences of other transition countries have shown that these Private Infrastructure Programs - usually with a low fulfilment ratio - are not indispensable policy instruments to provide for long-term investment and are not automatically conducive to economic growth. Adequate infrastructure investment should contribute to sustainable economic growth of the country.

Suggested Citation

  • Paul J.J. Welfens & Ekaterina Markova, 2004. "Private and Public Financing of Infrastructure: Theory, International Experience and Policy Implications for Russia," EIIW Discussion paper disbei119, Universitätsbibliothek Wuppertal, University Library.
    • Handle: RePEc:bwu:eiiwdp:disbei119
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Public and Private Financing; Infrastructure; Russia;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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