The unfounded enthusiasm towards private participation in infrastructure

ABSTRACT

Despite the widespread enthusiasm for private participation in the provision of infrastructure, international assessments of its results are rare and inconclusive. Audit offices are generally skeptical of their superiority, multilateral institutions have been cautious, and the population is critical in many countries. I show these frustrating results are associated with the extraordinary profits and slow progress of productivity derived from reduced competition and ineffective regulation common in the sector, and point out reasons that explain this situation. I argue that enthusiasm is theoretically and empirically unfounded, and that on the ideological acceptance of two crucial, highly questionable hypotheses.

KEYWORDS:
Public-private partnership; infrastructure