Working paper

The Economic Impact of public private partnerships (PPPs) in Infrastructure, Health and Education: A Review

Anaïs Fabre, and Stéphane Straub

Abstract

This paper summarizes what is known about the impact of Public-Private Partnerships (PPPs) in infrastructure (energy, transport, water and sanitation, and telecommunications), education, and health. It reviews evaluations of the effectiveness of PPPs and, whenever possible, the implications for coverage and affordability. For infrastructure, there is some evidence of PPPs leading to gains in labor productivity, as most transitions to private participation have entailed significant labor downsizing, but only mixed support for improvements in total factor productivity or quality, coverage, and affordability. Selection issues plague most available studies, calling for caution when considering the conclusions. For education, micro-level studies shows that PPPs have the potential to increase enrollment and respond to a growing demand for education, but that their impact on educational outcomes appears to depend greatly on the institutional details and the scale of the programs considered. Finally, PPPs appear to be likely to increase socio-economic and ethnic segregation in education systems. Finally, there is inconclusive evidence of an impact of PPPs on health service utilization, the quality of services, patient satisfaction and health-related outcomes. The review points to the need to identify the reasons for service under-utilization, such as lack of information on the side of users, poor quality of services, before implementing interventions, and to combine demand- and supply-side policies if needed. Overall, more work appears to be due to rigorously evaluate the impact of PPPs, especially regarding infrastructure and health.

Keywords

Public private partnership; evaluation; infrastructure; education; health;

JEL codes

  • H54: Infrastructures • Other Public Investment and Capital Stock
  • I11: Analysis of Health Care Markets
  • I21: Analysis of Education
  • L33: Comparison of Public and Private Enterprises and Nonprofit Institutions • Privatization • Contracting Out

Reference

Anaïs Fabre, and Stéphane Straub, The Economic Impact of public private partnerships (PPPs) in Infrastructure, Health and Education: A Review, TSE Working Paper, n. 19-986, January 2019.

See also

Published in

TSE Working Paper, n. 19-986, January 2019