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When and How to Use Public-Private Partnerships in Infrastructure: Lessons from the International Experience

Author

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  • Eduardo Engel
  • Ronald Fischer
  • Alexander Galetivoc

Abstract

In the last 30 years public-private partnerships (PPPs) have emerged as a new organizational form to provide public infrastructure. Governments find them attractive because PPPs can be used to avoid fiscal check-and-balances and increase spending. At the same time, PPPs can lead to important efficiency gains, especially for transportation infrastructure. These gains include better maintenance, reduced bureaucratic costs, and filtering white elephants. For these gains to materialize, it is necessary to set up a governance structure, that is more sophisticated than the governance of traditional infrastructure provision. The governance structure can be complemented by variable-term contracts that allocate demand risk efficiently, and by avoiding opportunistic renegotiations, which have been pervasive. The good news is that, based on the experience with PPPs over the last three decades, we have learnt how to cope with these challenges. Por aparecer en: Poterba, J. and Glaezer, E. (eds) "The Economics of Infrastructure Investment", MIT Press. Key words:

Suggested Citation

  • Eduardo Engel & Ronald Fischer & Alexander Galetivoc, 2021. "When and How to Use Public-Private Partnerships in Infrastructure: Lessons from the International Experience," Documentos de Trabajo 349, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:349
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    Cited by:

    1. Inderst, Georg, 2020. "Social Infrastructure Finance and Institutional Investors. A Global Perspective," MPRA Paper 99239, University Library of Munich, Germany.
    2. Jing Zhao & Wei Wang, 2024. "Impact of Tax Reductions on Public–Private Partnership Projects: Evidence from Comprehensive Implementation of China’s Business Tax to Value-Added Tax Reform," Sustainability, MDPI, vol. 17(1), pages 1-22, December.
    3. Charles M. Kahn & Anderson Caputo Silva & Gonzalo Martinez Torres, 2023. "Literature Review and Framework for Institutional Investor Mobilization," World Bank Publications - Reports 40273, The World Bank Group.
    4. Andrés Gómez-Lobo & Daniel Oviedo, 2023. "Spatial Inequalities in Latin America: Mapping Aggregate to Micro-Level Disparities," LIS Working papers 869, LIS Cross-National Data Center in Luxembourg.
    5. Alex G. Miranda-Poggys & Marzia Morena, 2023. "A Critique on Public–Private–People Partnerships: From a Definitional Inconsistency to the Partnering Dilemma in Today’s Housing Conjunction," Sustainability, MDPI, vol. 15(6), pages 1-21, March.
    6. Bonifaz, José L. & Saavedra, Eduardo H., 2023. "Aggressive bidding and the renegotiation of concession contracts: Empirical evidence from Peru," Utilities Policy, Elsevier, vol. 85(C).
    7. Engel,Eduardo & Ferrari,Martín & Fischer,Ronald & Galetovic,Alexander, 2022. "Managing the Fiscal Risks Wrought by PPPs : A Simple Framework and Some Lessons from Chile," Policy Research Working Paper Series 10056, The World Bank.
    8. de Castro,Luciano & Frischtak,Claudio R. & Rodrigues,Arthur, 2023. "How to Deal with Exchange Rate Risk in Infrastructure and Other Long-Lived Projects," Policy Research Working Paper Series 10568, The World Bank.
    9. Engel, Eduardo & Fischer, Ronald D. & Galetovic, Alexander, 2024. "The company you keep: Renegotiations and adverse selection in transportation infrastructure," Economics of Transportation, Elsevier, vol. 38(C).
    10. Deborah de Lange, 2023. "Sustainable Transportation for the Climate: How Do Transportation Firms Engage in Cooperative Public-Private Partnerships?," Sustainability, MDPI, vol. 15(11), pages 1-21, May.
    11. Ginés de Rus, 2024. "Inversión en infraestructuras. La necesidad de reestructurar el modelo concesional español," Fedea Economy Notes 2024-03, FEDEA.
    12. Wolfstetter, Elmar G., 2022. "Universal high-speed broadband provision: A simple auction approach," Information Economics and Policy, Elsevier, vol. 60(C).
    13. Gómez-Lobo, Andrés & Oviedo, Daniel, 2023. "Spatial inequalities in Latin America: mapping aggregate to micro-level disparities," LSE Research Online Documents on Economics 120691, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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