Do Countries Learn from Experience in Infrastructure PPP? : PPP Practice and Contract Cancellation
Learning from experience to improve future infrastructure public-private partnerships is a focal issue for policy makers, financiers, implementers, and private sector stakeholders. An extensive body of case studies and "lessons learned" a...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/110761494334176932/Do-countries-learn-from-experience-in-infrastructure-PPP-PPP-practice-and-contract-cancellation http://hdl.handle.net/10986/26733 |
| Summary: | Learning from experience to improve
future infrastructure public-private partnerships is a focal
issue for policy makers, financiers, implementers, and
private sector stakeholders. An extensive body of case
studies and "lessons learned" aims to improve the
likelihood of success and attempts to avoid future contract
failures across sectors and geographies. This paper examines
whether countries do, indeed, learn from experience to
improve the probability of success of public-private
partnerships at the national level. The purview of the paper
is not to diagnose learning across all aspects of
public-private partnerships globally, but rather to focus on
whether experience has an effect on the most extreme cases
of public-private partnership contract failure, premature
contract cancellation. The analysis utilizes mixed-effects
probit regression combined with spline models to test
empirically whether general public-private partnership
experience has an impact on reducing the chances of contract
cancellation for future projects. The results confirm what
the market intuitively knows, that is, that public-private
partnership experience reduces the likelihood of contract
cancellation. But the results also provide a perhaps less
intuitive finding: the benefits of learning are typically
concentrated in the first few public-private partnership
deals. Moreover, the results show that the probability of
cancellation varies across sectors and suggests the relative
complexity of water public-private partnerships compared
with energy and transport projects. An estimated $1.5
billion per year could have been saved with interventions
and support to reduce cancellations in less experienced
countries (those with fewer than 23 prior public-private partnerships). |
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