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Public-Private Partnerships and Investment in Infrastructure

Author

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  • Sónia Araújo

    (OECD)

  • Douglas Sutherland

Abstract

How can governments reap the potential benefits of public-private partnerships (PPPs) in the provision of infrastructure? Private sector involvement in the provision of public goods is long-standing, often relying on franchises or concessions. More recently, PPPs have risen in prominence, promising innovative solutions and a better allocation of inputs than traditional procurement with separate concessions. However PPPs are not without risks with the outcome depending on the identification of the most efficient bidder, the risk sharing between the public and private sector and the design of the contractual relationship. Furthermore, PPPs, particularly when they are used to circumvent budgetary constraints, present risks to government budgets by creating large contingent liabilities. Drawing on a discussion of the economics of PPPs in relation to infrastructure and questionnaire responses, synthetic indicators are used to assess how well-suited policy frameworks in the OECD are to benefit from PPPs. The results show marked heterogeneity across countries, suggesting there is scope to improve performance and gain expertise by considering other countries? experiences. Partenariats public-privé et investissement en infrastructures Comment le secteur public peut-il tirer parti des avantages éventuels des partenariats public-privé (PPP), s?agissant de la mise à disposition d?infrastructures ? Le secteur privé intervient de longue date dans l?offre de biens publics, souvent dans le cadre de concessions. Plus récemment, les PPP ont gagné en importance, présageant de solutions novatrices et d?une affectation des ressources plus efficace que celle de la passation de marchés classique basée sur des concessions distinctes. Mais les PPP ne sont pas dénués de risques, leur résultat étant tributaire de la sélection du soumissionnaire le plus efficient, du partage des risques entre secteurs public et privé, ainsi que du montage contractuel retenu. De plus, surtout si l?on y fait appel pour échapper à des contraintes budgétaires, ils entraînent des risques pour les budgets publics parce qu?ils génèrent d?importants passifs éventuels. Des indicateurs synthétiques, établis à partir d?une analyse des aspects économiques des PPP dans le domaine des infrastructures et des réponses à un questionnaire, sont utilisés pour évaluer dans quelle mesure les cadres d?action des pays de l?OCDE sont adaptés pour exploiter les avantages des PPP. Il en ressort une forte hétérogénéité internationale, qui laisse entrevoir des possibilités d?améliorer les résultats et d?acquérir des connaissances en étudiant les expériences des autres pays.

Suggested Citation

  • Sónia Araújo & Douglas Sutherland, 2010. "Public-Private Partnerships and Investment in Infrastructure," OECD Economics Department Working Papers 803, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:803-en
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    File URL: http://dx.doi.org/10.1787/5km7jf6q8f0t-en
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    Citations

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    Cited by:

    1. Hansjörg Blöchliger, 2013. "Fiscal Consolidation Across Government Levels - Part 1. How Much, What Policies?," OECD Economics Department Working Papers 1070, OECD Publishing.
    2. Caroline Klein & Robert W. R. Price & Andreas Wörgötter, 2013. "Improving the Fiscal Framework to Enhance Growth in an Era of Fiscal Consolidation in Slovakia," OECD Economics Department Working Papers 1018, OECD Publishing.
    3. Robert P. Hagemann, 2012. "Fiscal Consolidation: Part 6. What Are the Best Policy Instruments for Fiscal Consolidation?," OECD Economics Department Working Papers 937, OECD Publishing.
    4. Pekka Leviakangas & Pekka Kess & Jaakko Kujala, 2013. "Investment Analysis in Public-Private-Partnership Projects: Any Common Ground for Public and Private Investors?," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management, ToKnowPress.
    5. Emily Poole & Carl Toohey & Peter Harris, 2014. "Public Infrastructure: A Framework for Decision-making," RBA Annual Conference Volume,in: Alexandra Heath & Matthew Read (ed.), Financial Flows and Infrastructure Financing Reserve Bank of Australia.
    6. Douglas Sutherland & Peter Hoeller & Rossana Merola, 2012. "Fiscal Consolidation: Part 1. How Much is Needed and How to Reduce Debt to a Prudent Level?," OECD Economics Department Working Papers 932, OECD Publishing.

    More about this item

    Keywords

    biens publics; contrats incomplets; incitations à l'investissement; incomplete contracts; investment incentives; partenariats public-privé; public goods; public private partnerships;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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