The purpose of the paper was to discuss the existing and future potential of PPPs in helping achieve the 2030 Agenda for Sustainable Development and the Addis Abba Action Agenda, in particular in the area of infrastructure investment. PPPs have recently undergone somewhat of a renaissance in the international policy discourse with many countries and organizations pointing to their potential to generate new resources and increase efficiency for public service provision.
However, the evidence suggests that PPPs have often tended to be more expensive than the alternative of public procurement while in a number of instances they have failed to deliver the envisaged gains in quality of service provision, including its efficiency, coverage and development impact. In other words, they have failed to yield 'value for money' in its broadest sense taking into account not just the financial costs and efficiency gains deriving from a project but also its longer-term fiscal implications (including the risks of any contingency liabilities) as well as the broader welfare benefits for society such as the impact on poverty and sustainable development.
The impact of PPPs moreover varies across sectors. Research findings indicate that PPPs are generally better suited for economic infrastructures such as transport and electricity, where demand is relatively steady and the impact on service quality easy to assess, and where better quality infrastructure can lower cost at the operational stage. However, they are less likely to deliver efficiency gains in the social sector such as hospitals and schools where access and equity are major concerns.
Despite a recent rise in the private sector's participation in infrastructure finance in developing countries, especially in electricity and telecommunications, private finance continues to provide just a small portion of aggregate infrastructure investment in the developing world. If PPPs are to be scaled up, there has to be sound understanding as to their ultimate purpose, namely to add value for money, i.e. to improve the coverage, access, quality and efficiency of a given service to the citizen. A commonly accepted definition of PPPs, something that is still sorely lacking, should be firmly anchored in such an understanding.
For PPPs to become an effective instrument for financing key economic infrastructure projects, it is necessary that countries have in place the institutional capacity to create, manage and evaluate PPPs. For a number of developing countries, this would require assistance from the international community in the form of technical support and capacity building. In this connection, the paper further argues that donor support for public sector capacity building in developing countries may be better spent than the current trend of blended finance, which frequently channels aid money directly to the private sector, including for PPPs
Finally, we stress the need for further work on developing international guidelines for PPPs, as called for in the Addis Ababa Action Agenda13. Many important initiatives are underway but they could be significantly strengthened if they were discussed in a more inclusive multi-stakeholder setting, such as the follow up process to the Third International Conference on Financing for Development, that would involve UN Member States, civil society, the private sector and other stakeholders. The UN, as the most legitimate international forum for international policy-making, can play a key role in forging these new guidelines for PPPs, which should fully support the implementation of the 2030 Agenda for Sustainable Development.
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13 See United Nations Addis Ababa Action Agenda, Para 48:" We also commit to holding inclusive, open and transparent discussion when developing and adopting guidelines and documentation for the use of public-private partnerships, and to build a knowledge base and share lessons learned through regional and global forums."