## Public Investment and Public-Private Partnerships

_Economic Issues, March 21, 2007_

## Source details

**Canonical URL:** [Public Investment and Public-Private Partnerships](https://www.imf.org/en/publications/economic-issues/issues/2016/12/31/public-investment-and-public-private-partnerships-18456)

## Other formats

- [Markdown version](/en/publications/economic-issues/issues/2016/12/31/public-investment-and-public-private-partnerships-18456/index.md)
- [Structured JSON version](/en/publications/economic-issues/issues/2016/12/31/public-investment-and-public-private-partnerships-18456/index.json)
- [Bundle manifest](/en/publications/economic-issues/issues/2016/12/31/public-investment-and-public-private-partnerships-18456/bundle-manifest.json)

## Bibliographic details
- Authors: Bernardin Akitoby, Gerd Schwartz, Richard Hemming
- Published: March 21, 2007
- Series: Economic Issues
- DOI: https://doi.org/10.5089/9781589064782.051

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### Overview and framing
- Over the past three decades, public spending on infrastructure, as a share of GDP, has been on the decline worldwide.
- The link between infrastructure investment and economic growth is not yet fully understood.
- The quality of infrastructure clearly affects a country's productivity, competitiveness in export markets, and ability to attract foreign investment.
- This Economic Issues (EI) explores the following policy questions:
  - Should countries increase public investment in infrastructure?
  - If the answer is yes, how can they do so in a fiscally responsible manner?
  - Are public-private partnerships a viable alternative?

### Key findings and themes
- Declining trend: public infrastructure spending (share of GDP) has declined globally over the past three decades.
- Evidence limitations: the causal relationship between infrastructure investment and economic growth remains incompletely understood.
- High-impact channels: infrastructure quality influences productivity, export competitiveness, and foreign direct investment attraction.
- Policy tension: the need to boost infrastructure is balanced against fiscal responsibility and public debt considerations.
- Role of PPPs: the EI examines whether public-private partnerships are a viable alternative to traditional public investment.

### Policy questions and analytical focus
- Should public investment in infrastructure be increased?
  - The EI poses this fundamental question and evaluates trade-offs between growth benefits and fiscal constraints.
- How to increase public investment in a fiscally responsible manner?
  - The EI investigates mechanisms and fiscal frameworks to expand infrastructure spending without undermining fiscal sustainability.
- Are public-private partnerships (PPPs) a viable alternative?
  - The EI assesses PPPs as an alternative delivery and financing model, considering fiscal risks and management requirements.

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_Source: https://www.imf.org/en/publications/economic-issues/issues/2016/12/31/public-investment-and-public-private-partnerships-18456_