Residual government ownership in public-private partnership projects

Social and economic infrastructure are essential for economic development. However, over the last three decades, many infrastructure projects in developing countries have failed. These failures raise the question as to the role of governments in the provision, and longevity, of much needed infrastructure. In this paper, we seek to examine the significance of governments’ residual ownership in determining the failure of infrastructure projects that started as Public-Private Partnerships (PPP). We utilise duration analysis to analyse 2721 PPP projects across six regions globally and find that assigning the residual ownership of infrastructure projects to the government reduces the probability of project failure. It may be the case that assigning the risk of residual ownership to governments makes the project more affordable to end users. We also find that both project size and sector play an important role in determining the probability of project failure. These findings provide policy insights and highlights issues around the way infrastructure projects in developing countries are negotiated between the private sector and governments.