IDEAS home Printed from
   My bibliography  Save this paper

Can PPPs Help Close the Infrastructure Gap in the Transition Economies?


  • Geoffrey Hamilton

    () (United Nations Economic Commission for Europe)


This paper dealing with financing development addresses how public infrastructure can be paid for and managed in an environment where public resources are limited but the investment needs for these services are great. This is a characteristic that succinctly describes many of the emerging markets of the region. With insufficient resources in government budgets there has been a need and an increasing tendency to rely more on the private sector to build, maintain and manage infrastructure projects. Public-private partnerships (PPPs) represent a flexible institutional arrangement that allows the public and private sectors to share responsibility in achieving social objectives with specific responsibilities entrusted to the entity that can accomplish it most effectively. However, as with any other institutional structure, the devil is in the details, and in many of the transition economies in the 1990s the details were not appropriately designed. This paper analyses what is required for governments to be able to effectively use this financial model. Seven lessons are provided based upon an analysis of many PPPs that have been implemented in a number of different sectors and countries. In addition, it is emphasized that the effective use of PPPs, which properly considers developmental objectives, can help society not only achieve the cost-effective provision of services but can also increase accessibility of services to the poor and to geographically disadvantaged regions.

Suggested Citation

  • Geoffrey Hamilton, 2008. "Can PPPs Help Close the Infrastructure Gap in the Transition Economies?," UNECE Annual Report Economic Essays 2008_4, UNECE.
  • Handle: RePEc:ece:annrep:2008_4

    Download full text from publisher

    File URL:
    File Function: First version, 2008
    Download Restriction: no

    References listed on IDEAS

    1. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
    2. R. Lensink & H. White, 2001. "Are There Negative Returns to Aid?," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 42-65.
    3. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
    4. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    5. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398, April.
    6. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    7. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, EconWPA.
    8. Isham, Jonathan & Kaufmann, Daniel & Pritchett, Lant, 1995. "Governance and returns on investment : an empirical investigation," Policy Research Working Paper Series 1550, The World Bank.
    9. Levy, Victor, 1988. "Aid and growth in Sub-Saharan Africa: The recent experience," European Economic Review, Elsevier, vol. 32(9), pages 1777-1795, November.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Financing for development; infrastructures; public-private partnerships; Europe; transition economies; savings; investment;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ece:annrep:2008_4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Shelburne). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.