Relationship between state institutions and private participation in infrastructure in developing economies: A case study approach
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Private participation in infrastructure programs is a favoured policy approach to accelerating infrastructure provision in developing economies. Recent transactional evidence points to the benefits of privately financed and managed infrastructure and particularly public private partnerships (PPPs) through improved procurement outcomes at lower cost than conventional procurement methods. The literature also points to the importance of public and social institutions in providing a framework that permits the market sector to operate efficiently, to competitively bid for projects, and raise the capital required to successfully bid for long-term investments with certainty. This paper examines the relationship between institutional development and the delivery of Public-Private Infrastructure projects using case studies in three developing and transition economies in Africa: Kenya, Nigeria and Algeria. The case studies were selected from a wider study of developing nations using development classifications and data prepared by the World Economic Forum for the 5 years to 2010, and Private Participation in Infrastructure (PPI) transactional data provided by Public-Private Infrastructure Advisory Facility (PPIAF) and the World Bank for the same period. Specifically, the study attempts to identify the connection between basic and efficiency-enhancing state institutions and private investment in infrastructure services for the three countries given their present stage of development.
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