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The effect of MDB-financed infrastructure PPPs on corruption: A comparative panel data study

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  • Jeung, Joo Eun
  • Atukeren, Erdal
  • Cho, Dong Sung

Abstract

In view of the increasing adoption of infrastructure Public-Private Partnership (PPP) and PPP’s susceptibility to corruption, we need to understand PPP’s role in sustainable development. This study is a comparative analysis of the effects on corruption of Plain PPPs Group and Multilateral Development Bank (MDB)-financed PPPs Group in developing countries by fixed effects model using panel data. We find that Plain PPPs Group increases corruption; lower middle-income subgroup shows the largest effect, followed by low-income subgroup. In contrast, MDB-financed PPPs Group reduces corruption with a time lag; only lower middle-income subgroup has the corruption reduction effect. Upper middle-income subgroup in each Group has no effect on corruption. Our findings highlight the positive role of MDB-financed PPP projects in corruption reduction and the importance of anti-corruption policy in PPP projects, particularly in lower middle-income and low-income countries. The beneficial effect of MDB-financed PPPs is attributed to MDBs’ anti-corruption policy measures and the PPP participants’ long-term compliance with them. Governments in lower middle-income and low-income countries need to encourage effective anti-corruption policies in PPP projects to ensure the projects contribute to sustainable development.

Suggested Citation

  • Jeung, Joo Eun & Atukeren, Erdal & Cho, Dong Sung, 2026. "The effect of MDB-financed infrastructure PPPs on corruption: A comparative panel data study," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s1544612325018471
    DOI: 10.1016/j.frl.2025.108593
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