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Public-Private Sector Partnerships in Developing Countries: Prospects and Drawbacks


  • Argentino Pessoa

    () (Faculdade de Economia do Porto, Universidade do Porto)


Many developing countries are searching positive impacts on the efficiency, equity and quality provision of the public services through increasing competition and active participation of the private sector, considering public-private partnerships (PPPs) as the appropriate instrument to attain such endeavour. Accordingly, PPPs have been used for many and widespread purposes, ranging from the construction of physical infrastructure, to the provision of health and social services, to public administration. But, while the idea of a PPP in general is theoretically appealing, its practical implementation in developing countries is not so easy as theory suggests. Perhaps partly for that reason, a large number of implemented PPPs have left the contractual parties dissatisfied, which may indicate that, either developing country authorities, or investors (or both) may have had too high expectations to what could be attained. Though some contracts have been granted under circumstances that made them susceptible to changes in the political environment, the large majority of the others have also suffered from inflated or unrealistic expectations. So, the need for a legal and regulatory framework, which can guarantee a transparent and credible relationship between the different actors, is critical. Unfortunately many, if not all, regulators in developing countries lack one, or more, qualities required for an effective regulation.

Suggested Citation

  • Argentino Pessoa, 2006. "Public-Private Sector Partnerships in Developing Countries: Prospects and Drawbacks," FEP Working Papers 228, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:228

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    References listed on IDEAS

    1. Tonci Bakovic & Bernard Tenenbaum & Fiona Woolf, 2003. "Regulation by Contract : A New Way to Privatize Electricity Distribution?," World Bank Publications, The World Bank, number 15078, June.
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    Cited by:

    1. Richard M. Locke & Ben A. Rissing & Timea Pal, 2013. "Across Boundaries: The Global Challenges Facing Workers and Employment Research 50th Anniversary Special Issue," British Journal of Industrial Relations, London School of Economics, vol. 51(3), pages 519-552, September.
    2. Argentino Pessoa, 2010. "Reviewing Public–Private Partnership Performance in Developing Economies," Chapters,in: International Handbook on Public–Private Partnerships, chapter 25 Edward Elgar Publishing.

    More about this item


    Contracting out; public services; market/government failure; infrastructures; public-private partnership;

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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