Determinants of Public Private Partnerships in Infrastructure: A Study of Developing Countries

Abstract

Enormous contribution of infrastructure in stimulating economic growth has been recognized both in academics as well as in policy debates all across the globe, and developing countries are not an exception (Tewodaj, 2013; Esfahani and Ramirez 2003; Canning and Pedroni 2008; Aschauer 1989). One of the major bottlenecks observed in growth of developing countries is the huge infrastructure gap i.e. the difference between what is required and what is provided to them with regard to provision of infrastructure. Subsequently, the most of the developing countries lack the necessary and adequate financial resources to fill the infrastructure gap. Hence, Private participation in infrastructure (PPI) is the way forward, and Public Private Partnerships (PPPs) are the best alternative among public provision and privatization (Engel et al., 2011). To engage private participation in infrastructure, it is pertinent for policy think tank of these countries to know about the factors determining the PPPs in Infrastructure. With an objective to identify the determinants of PPPs in Infrastructure, the results of the study using data of the sample courtiers from 1990 to 2016 revealed that countries having stable macro economic conditions are likely to engage more PPPs. Subsequently, it was found that Countries with larger markets with huge purchasing power are in a strong footing to attract Private Participation in Infrastructure. Eventually, the governance has been found affecting the PPPs to a great extent.

Keywords: PPP, Infrastructure, Determinants, Developing Countries, Number of PPP Transactions

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