What lies beneath? A critical assessment of PPPs and their impact on sustainable development

9 July, 2015
Source: 
Eurodad
This report by Eurodad, the European Network on Debt and Development, looks at the empirical and theoretical evidence available on the nature and impact of PPPs, and analyses the experiences of Tanzania and Peru. It critically assesses whether PPPs deliver on the promises of their proponents and gives concrete recommendations for policymakers.

Overall, the report finds that:

  • PPPs are, in most cases, the most expensive method of financing, significantly increasing the cost to the public purse.
  • PPPs are typically very complex to negotiate and implement and all too often entail higher construction and transaction costs than public works.
  • PPPs are all too often a risky way of financing for public institutions.
  • The evidence of impact of PPPs on efficiency is very limited and weak.
  • PPPs face important challenges when it comes to reducing poverty and inequality, while avoiding negative impacts on the environment.
  • Implementing PPPs poses important capacity constraints to the public sector, and particularly in developing countries.
  • PPPs suffer from low transparency and limited public scrutiny, which undermines democratic accountability.

As this report is published, the post-2015 and the financing for development agendas are being negotiated. PPPs are proposed as a key component of the financing for development agenda in response to pressing infrastructure needs. However, it is crucial to take into account what has happened so far and examine whether PPPs will help the world’s poorest countries to finance the roads, schools, hospitals, energy and other infrastructure facilities they need to grow and thrive.

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More information on the Eurodad website.

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