Public-Private Partnerships: A Public Economics Perspective
IMF Working Papers, March 1, 2006
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Bibliographic details
- Authors: Efraim Sadka
- Published: March 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451863376.001
Summary
- Public-private partnerships (PPPs) involve the supply by the private sector of infrastructure and services deriving from infrastructure assets which have traditionally been supplied by the public sector.
- PPPs are spreading all over the world.
- PPPs may initially have been an attempt to evade expenditure controls and hide public budget deficits.
- If properly designed and transparently reported, PPPs can enhance the efficiency of the provision of services that were formerly supplied solely by the public sector.
- This paper provides a public economics perspective on PPPs.
Main findings and themes
- Nature and scope:
- PPPs transfer the supply of infrastructure and derived services from the public sector to the private sector.
- Motivations and risks:
- PPPs may be used to evade expenditure controls and hide public budget deficits.
- Conditions for effectiveness:
- Proper design and transparent reporting are critical for PPPs to enhance efficiency in service provision.
- Coverage:
- The paper addresses public economics aspects of PPPs in the context of budget planning, public investment, and tax incentives.
Policy implications and recommendations
- Design:
- Emphasize proper design of PPP contracts to ensure efficiency gains.
- Transparency:
- Prioritize transparent reporting of PPP arrangements to avoid concealment of fiscal commitments and deficits.
- Fiscal oversight:
- Strengthen budget planning and preparation to mitigate risks that PPPs are used to bypass expenditure controls.