Policymakers' Decisions on Public-Private Partnership Use: The Role of Institutions and Fiscal Constraints

Reyes-Tagle, Gerardo; Garbacik, Karl

doi:10.18235/0000555

Cited by 10 publications

(6 citation statements)

References 11 publications

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“…Due to the scarcity of funds, these governments are unable to meet the wide infrastructure deficit, thereby depriving the people of basic needs. In such situations, PPPs allow governments to fund infrastructure while not putting additional pressure on their budgets (Levi€ akangas et al, 2016;Reyes-Tagle and Garbacik, 2016;Lee and Kim, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

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Determinants of public–private partnerships: a state-level empirical analysis of India

Kaur

Malik

2020

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PurposeIn view of the significance of public–private partnerships (PPPs) as a tool for bridging infrastructure deficits, it becomes imperative to study its determinants. The objective of this paper is to empirically study the determinants of PPPs in India at a subnational level, in terms of both number and value of PPP projects.Design/methodology/approachThis study investigates the determinants of value and number of Indian PPPs at a subnational level for the period 2008–2017. The determinants are analyzed using two-step system generalized method of moments (GMM) and negative binomial regression. Select correlates examined are market size, fiscal compulsions, institutional quality, financial sector development and physical infrastructure.FindingsThe results indicate that fiscal compulsions, financial sector development and physical infrastructure influence PPPs favorably, whereas low institutional quality impacts PPPs adversely. A pertinent finding of this study is that the past value of PPPs lowers the current year's PPP value.Practical implicationsThe findings are expected to assist subnational governments and policymakers in formulating policies that attract more PPP projects (in terms of both value and number).Originality/valueThis is the first study that analyzes the determinants of infrastructure PPPs at a subnational level in India.

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Section: Literature Reviewmentioning

confidence: 99%

“…It also assures the private sector of effective handling of project-specific issues (Pessoa, 2006;Mota and Moreira, 2015;Hyun et al, 2019). As a result, PPPs are less prone to suffer from corruption and cronyism (Phua et al, 2014;Reyes-Tagle and Garbacik, 2016;Albalate et al, 2018). Previous experience with PPPs.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of public–private partnerships: a state-level empirical analysis of India

Kaur

Malik

2020

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“…Studies show that PPPs are less prone to corruption and exploitation when there exist high-level quality institutions (Phua et al, 2014;Reyes-Tagle and Garbacik, 2016;Iossa and Martimort, 2016;Albalate et al, 2018). Access to well-developed financial network also plays a central role in attracting private investments by cutting in the associated costs and providing cheaper finance to drive the superior yields under PPP projects (Sharma, 2012;Vecchi et al, 2017;Hyun et al, 2019).…”

Section: Review Of the Literaturementioning

confidence: 99%

“…Studies show that PPPs are less prone to corruption and exploitation when there exist high-level quality institutions (Phua et al. , 2014; Reyes-Tagle and Garbacik, 2016; Iossa and Martimort, 2016; Albalate et al. , 2018).…”

Section: Review Of the Literaturementioning

confidence: 99%

Who does it better and why? Empirical analysis of public-private partnership in infrastructure in Asia-Pacific

Sharma

2022

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PurposeThis research has two primary goals: first, to develop a composite index that evaluates the degree to which Asian–Pacific economies are prepared to engage in public–private partnerships (PPPs), and second, to investigate the factors that have been most influential in the formation of PPP arrangements in the nations' infrastructure over the course of the period 1995–2016.Design/methodology/approachThe study constructs sectoral and overall index of possible determinants of PPP. Subsequently, it examines each constructed index's role in PPP investment. The author also conducted a panel data analysis to understand the role of each of the potential determinants on PPP projects and investments. This paper analyzes the author’s empirical models using a range of cross-section and panel estimators, including Poisson, zero-inflated Poisson and fixed effect.FindingsThe study’s results based on cross-section analysis suggest that regulatory and institution quality, institutional arrangement and regulatory frameworks, financial market development and macroeconomic stability positively impact investment in PPP. Moreover, the results depict that financial market development has the most substantial impact on PPP investment, followed by macroeconomic stability and prior experience with PPPs. The panel data analysis shows that per-capita income, financial development, inflation, debt, resource import and fuel export are crucial determinants of PPP in Asian–Pacific economies.Practical implicationsGovernments of the countries should promptly amend the important policies outlined in this study and adopt a more robust strategy to foster a competitive PPP environment. This will aid in maintaining transparency and gaining the confidence of investors. The study’s findings may assist policymakers in focusing on specific areas in need of improvement. Social welfare and industrialization are ultimately enhanced by the formulation of such policies and by attracting additional infrastructure investment.Originality/valueThis is the first attempt to rank countries on the basis of PPP enablers. Unlike previous studies, this study examines the role of a large number of indicators in determining PPP investment and projects in cross-section as well as panel data framework. The study also investigates the effects of PPP specific provisions and rules. Furthermore, the focus is specifically on Asian–Pacific countries, which are a mix of third-world, emerging, developing and developed countries. Focusing on Asia–Pacific is also crucial because the region is home to most of the world's population, and the region's infrastructure outcomes significantly impact their lives.

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“…Higher demand for the product increases the possibility of regular income, thereby providing growth possibilities (Sharma, 2012). Further, a higher economic growth rate implies a stable macroeconomic environment and promises future increment in revenues (Leviäkangas et al, 2016;Reyes-Tagle and Garbacik, 2016).…”

Section: Variables Affecting the Extent Of Public-private Partnershipsmentioning

confidence: 99%

Multi-dimensional public–private partnership readiness index: a sub-national analysis of India

Malik

Kaur

2020

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Purpose Despite being a global public–private partnerships (PPPs) leader, India faces a vast PPP divide at a sub-national level, wherein a few states receive the majority of PPP projects, whereas other states face severe issues in attracting PPP investments. This necessitates the identification of factors that make some states attractive to PPP investors. The purpose of this study is to construct a “PPP readiness index” at the Indian state-level, which aims to assess the readiness of states for the diffusion of PPPs. Design/methodology/approach Using a quantitative method on secondary data, the study scores 17 Indian states on dimensions such as experience with PPPs, physical infrastructure, financial sector development, market conditions, institutional quality and political stability and fiscal constraints for each of the years during 2009–2018. Principal component analysis is used for assigning weights to the dimensions, thereby arriving at the composite index. Findings Results highlight that Tamil Nadu and Maharashtra offer the most favorable environment for PPPs to flourish. In contrast, Jharkhand and Bihar are laggards because they score the least and have limited PPP experience. Practical implications The index will assist the private sector in conducting a comparative analysis between state-specific PPP arrangements, thereby enabling them to make informed decisions prior to forging PPP arrangements. Further, the index will help the state governments in improving their PPP readiness by following the policies of the leading states. Social implications Improvement in PPP readiness of the states will enable higher PPP investments in infrastructure, thereby reducing infrastructure deficits. This, in turn, will lead to economic growth, development and an improvement in the quality of life. Originality/value To the best of the authors’ knowledge, this is the first study that comprehensively analyzes the PPP readiness at a sub-national level in India.

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Policymakers' Decisions on Public-Private Partnership Use: The Role of Institutions and Fiscal Constraints

Cited by 10 publications

References 11 publications

Determinants of public–private partnerships: a state-level empirical analysis of India

Determinants of public–private partnerships: a state-level empirical analysis of India

Who does it better and why? Empirical analysis of public-private partnership in infrastructure in Asia-Pacific

Multi-dimensional public–private partnership readiness index: a sub-national analysis of India

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