Involving the Private Sector and PPPs in Financing Public Investments: Some Opportunities and Challenges

  • Ehtisham AhmadEmail author
  • Amar Bhattacharya
  • Annalisa Vinella
  • Kezhou Xiao


Given the paucity of public resources, it is important to consider relying on the private sector for financing public investments and infrastructure. There are considerable expectations concerning Public–Private-Partnerships (PPPs) in supplementing public resources, but also risk sharing with the public sector. However, these contracts are subject to abuse, given asymmetric information, and game-play across levels of government that lead to the risks being borne by the central government or subsequent administrations. Specialized agencies can play a useful role in supporting subnational governments with the complex contracting arrangements needed for PPPs. We see that strengthened Public Financial Management is needed, to track the build-up of liabilities at the subnational level, and also own-source revenues to ensure accountability. Uncertainty, including with climate change, may require different arrangements—and the options are addressed in a subsequent paper Ahmad, Vinella and Xiao (2017), but the risk-sharing aspects of PPPs may be relevant in many cases.


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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  • Ehtisham Ahmad
    • 1
    • 2
    • 3
    Email author
  • Amar Bhattacharya
    • 4
  • Annalisa Vinella
    • 5
  • Kezhou Xiao
    • 6
  1. 1.University of BonnBonnGermany
  2. 2.London School of EconomicsLondonUK
  3. 3.Pao Yu-Kong ProfessorZhejiang UniversityHangzhouChina
  4. 4.Brookings InstitutionWashingtonUSA
  5. 5.University of BariBariItaly
  6. 6.London School of EconomicsHoughtonUK

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