Publication: How Do Countries Measure, Manage, and Monitor Fiscal Risks Generated by Public-Private Partnerships? Chile, Peru, South Africa, Turkey
Loading...
Published
2014-09
ISSN
Date
2014-10-06
Author(s)
Editor(s)
Abstract
The topic of managing fiscal risks arising from public-private partnerships is receiving increased attention as more governments turn toward this type of financing for large infrastructure projects. Governments can manage balance sheet exposure to public-private partnerships by quantifying and capturing direct obligations and provisions for potential calls on government guarantees associated with public-private partnership projects in the preparation of the medium term fiscal framework and annual budget. This working paper examines how four countries with active public-private partnership projects manage the costs and risks of financial obligations generated by these investments throughout the lifetime of the contracts. The paper seeks to complement the existing literature with a practitioner's point of view while exploring if and how these countries monitor and evaluate the fiscal risks generated by the portfolio of public-private partnerships (as well as individual projects). The countries covered are Chile, Peru, South Africa, and Turkey, all of which have experience implementing public-private partnership projects. The research finds that countries have tailored fiscal risk management and monitoring frameworks to fit their circumstances and respective budgeting, accounting, and reporting practices. All four countries assess the overall or partial credit exposure to monitor and manage their fiscal commitments from public-private partnerships in a consolidated way. All countries have developed evaluation models to help assess fiscal risks and assess project and portfolio level credit exposure. Further scrutiny could be focused on budgeting and accounting practices, which could be strengthened and brought in line with international standards. Similarly, sharing and standardizing information would improve transparency and accountability.
Link to Data Set
Citation
“Aslan, Cigdem; Duarte, David. 2014. How Do Countries Measure, Manage, and Monitor Fiscal Risks Generated by Public-Private Partnerships? Chile, Peru, South Africa, Turkey. Policy Research Working Paper;No. 7041. © http://hdl.handle.net/10986/20375 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Climate and Social Sustainability in Fragility, Conflict, and Violence Contexts(Washington, DC: World Bank, 2026-01-07)Climate change is widely recognized as a driver of violent conflict, but its broader social effects remain less understood. Ignoring these dimensions risks a vicious cycle where climate policies might undermine socially just adaptation. Evidence is still limited on how climate shocks influence political participation, trust, or migration. This paper helps fill that gap by examining links between climate change, conflict, and social sustainability, with a focus on inclusion, resilience, cohesion, and legitimacy. Using secondary data from 2019–24, the study applies simple correlation-based methods to test three hypotheses on the nature, severity, and composition of these associations. The analysis combines multiple climate impact measures, new conflict classifications, recent social sustainability frameworks, and controls for population and geography. The results reveal strong correlations—not causation—between climate events and contexts of fragility, conflict, and violence. Climate impacts are most pronounced in both national and subnational conflict settings. The study also finds robust links between fragility, conflict, and violence and low levels of social sustainability, reflecting its role as both a driver and consequence of conflict. Some dimensions—such as violent events and insecurity—appear weaker in areas most affected by climate shocks. Two of the hypotheses are supported, and one remains inconclusive.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication Investment in Emerging and Developing Economies(Washington, DC: World Bank, 2026-01-07)The world faces a pressing challenge to meet key development objectives amid slowing growth and rising macroeconomic and geopolitical risks. With the number of job seekers rising rapidly, infrastructure shortfalls continuing to be large, and climate costs mounting, the case for a significant investment push has never been stronger. Yet the capacity to respond in many emerging markets and developing economies has eroded. Since the global financial crisis, investment growth has slowed to about half its pace in the 2000s, with both public and private investment weakening. Foreign direct investment inflows—a critical source of capital, technology, and managerial know-how—have also fallen sharply and become increasingly concentrated, leaving low-income countries with only a marginal share. The risks of further retrenchment are significant, as trade tensions, policy uncertainty, and elevated debt levels continue to weigh on investment. Reigniting momentum will require ambitious domestic reforms to strengthen institutions, rebuild macro-fiscal stability, and deepen trade and investment integration—the foundations of a supportive business climate. At the same time, international cooperation is indispensable. A renewed commitment to a predictable system of cross-border trade and investment flows, combined with scaled-up financial support and sustained technical assistance, is essential to help emerging markets and developing economies—especially low-income countries and economies in fragile and conflict situations—bridge financing gaps and implement the domestic reforms needed to restore investment as an engine of growth, jobs, and development.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Implementing a Framework for Managing Fiscal Commitments from Public Private Partnerships(World Bank, Washington, DC, 2014)This note presents practical guidance on how to implement a framework for managing fiscal commitments from Public-Private Partnerships (PPPs). It draws on specific regional operational experience and on World Bank Institute (WBI)'s wider thematic engagement with different partners worldwide. The note provides practical advice on how to: consistently identify and assess fiscal commitments arising from PPPs during project preparation and implementation; incorporate these into the project approval process, including budgeting for these appropriately; and strengthen the monitoring and reporting of fiscal commitments over the lifetime of the project. It explains the fiscal commitments that can arise from PPP projects; why governments may find it difficult to assess and manage these fiscal commitments and incorporate them into project selection; and the key components of an institutional framework to manage fiscal commitments at both the development and implementation stages of a project, including the roles, responsibilities, and processes for managing PPP fiscal commitments.Publication Managing Contingent Liabilities in Public-Private Partnerships(World Bank, Washington, DC, 2010)Contingent liabilities create management problems for governments. They have a cost, but judging what the cost is and whether it is worth incurring is difficult. Except in the case of contingent liabilities created by simple guarantees of debt, governments usually can incur contingent liabilities without budgetary approval or recognition in the governments accounts. So governments may prefer contingent liabilities to other obligations. (The uncertainty surrounding contingent liabilities can work differently. It is well known that PPPs create contingent liabilities, and the International Monetary Fund (IMF), the World Bank, and others often warn of the risks. The initial reaction of a cautious Ministry of Finance may be to seek to avoid all contingent liabilities.) Management problems also arise once a government has incurred a contingent liability. Projects need to be monitored to reduce risks if possible. Spending on contingent liabilities must sometimes be forecast, despite the difficulty.Publication Pakistan - Operational Design for the Project Development Fund and for the Viability Gap Fund(Washington, DC, 2010-03)This final report is the fifth deliverable for the World Bank funded project 'operational design for the project development fund and for the viability gap fund'. Taking into account feedback and further consideration of issues rose in the previous Reports, it aims to: provide high level recommendations on the overall Public Private Partnership (PPP) framework in Pakistan, recognizing international best practice but also taking into account the specific Pakistan context and the challenges faced their-in; provide the analysis of the project pipeline for PPP projects in Pakistan, on the basis of consultations undertaken in Islamabad in May 2009; and design possible structures for the Project Development Fund (PDF) and for the Viability Gap Fund (VGF), that is informed by the current local enabling environment for PPPs, including the institutional capabilities and the existing pipeline of PPP projects. This final report incorporates feedback from the World Bank and the Government of Pakistan on each of the above-listed issues, which were set out and discussed in details in previous reports.Publication Union of the Comoros : Debt Management Performance Assessment(Washington, Dc, 2011-06)This study shows that performance in terms of debt management has been weakened by recurrent political and institutional crises experienced by the country in recent years and has had a negative impact on the State's ability to both mobilize external financing and to honor its financial commitments. The accumulation of external arrears has increased by extension of the depletion sources of funding. However, the government recently initiated numerous actions contributing to a more serene climate at home with the establishment of democratic governance, developing a program of poverty reduction and regularization of arrears. This more favorable environment will soon pave the way for more substantial outside funding, especially following the accession of the Comoros to the enhanced Heavily Indebted Poor Countries (HIPC), and therefore requires the full attention of the authorities to implement better management of public debt. This evaluation is part of this perspective. Overall, performance in terms of debt management in the Comoros is satisfactory in all three of the following areas: (i) coordination with fiscal policy, including the integration of forecasts and actual payment of debt service in the preparation and monitoring of budget, (ii) coordination with monetary policy focused on the management of statutory advances granted by the Central Bank of Comoros (BCC), and (iii) procedures for payment of service external debt.Publication Analysis and Options for Namibia's Medium-Term Debt Strategy(Washington, DC, 2013-06)Since gaining its independence 23 years ago, Namibia has established an enviable track record of political stability, prudent macroeconomic policies, moderate growth, poverty reduction, and natural resource conservation. The country has achieved these gains while facing constraints imposed by geography, legacies of apartheid and colonialism, and the challenges of constructing a national government. Daunting challenges remain, however. Namibia suffers from chronic high unemployment, the ravages of HIV/AIDS, and one of the world most skewed distributions of income. The structure of the economy has remained fundamentally unchanged since Independence: minerals and metals make up the majority of exports; the public sector remains the largest employer; and there has been little investment in labor-intensive manufacturing, which in many countries has absorbed low-skilled labor exiting traditional agriculture. This report uses the Medium-Term Debt Management Strategy (MTDS) framework developed by the International Monetary Fund (IMF) and the World Bank to analyze options facing the GRN as it prepares the new Sovereign Debt Management Strategy (SDMS). This framework emphasizes the explicit analysis of relative costs and risks in a debt management strategy, the linkages between the debt strategy and other macroeconomic policies, and the strategy's consistency with debt sustainability. The report opens with a review of the GRN's current debt management strategy, the sources of financing available to the government, and the macroeconomic environment. The report then applies the MTDS analytical tool to analyze costs and risks of alternative debt management strategies that were developed by MOF participants in the November 2012 capacity-building exercise. It also examines domestic debt market development and contingent liabilities arising from government guarantees, two issues of special concern to the GRN. Finally, it discusses institutional arrangements and implementation issues.
Users also downloaded
Showing related downloaded files
Publication Intergovernmental Fiscal Transfers : Principles and Practice(Washington, DC : World Bank, 2007)The design of intergovernmental fiscal transfers has a strong bearing on efficiency and equity of public service provision and accountable local governance. This book provides a comprehensive one-stop window/source of materials to guide practitioners and scholars on design and worldwide practices in intergovernmental fiscal transfers and their implications for efficiency, and equity in public services provision as well as accountable governance.Publication Financing Municipal Energy Efficiency Projects(World Bank, Washington, DC, 2014-07)Improving the energy efficiency (EE) of municipally owned buildings, such as schools and hospitals, and municipal infrastructure, such as public lighting, water supply, and district heating, offers budgetary savings on energy bills and a wide range of environmental and socioeconomic benefits. But relatively few municipal EE projects have been developed and implemented successfully. The challenges that limit EE investments in municipal buildings and facilities can be grouped into three broad areas: (i) a lack of awareness and incentives; (ii) insufficient implementation capacity; and (iii) limited access to financing. All three sets of challenges need to be addressed to scale up successful implementation of municipal EE projects. This Guidance Note focuses on the key issues faced by municipalities in accessing financing for EE investments, particularly for projects in the following four areas: indoor lighting, building retrofits, public lighting, and municipal utilities. The guidance note discusses the following potential financing mechanisms that can be used by municipalities to finance EE measures: budget financing, Funds developed specifically to address energy efficiency, public support to leverage commercial financing, and commercial financing.Publication Planning Energy Efficient and Livable Cities(World Bank, Washington, DC, 2014-11)The world's urban population is expected to increase by about 2.7 billion by 2050.Virtually all of the increased population will be in developing countries, leading to massive needs for new and improved housing and urban infrastructures (UNDESA 2012). The planning and design of these new developments will reshape or create new urban landscapes with significant implications for energy consumption, infrastructure costs, as well as the livability and social and economic resilience of cities. Studies of cities around the world indicate that a city's livability and its level of energy use are closely linked to its physical form, namely the spatial distribution and dimensions of buildings, streets, and parks, as well as the spatial coordination of residences, jobs, social services, and environmental amenities.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication A Guide to Assessing Needs : Essential Tools for Collecting Information, Making Decisions, and Achieving Development Results(World Bank, 2012-01-06)This book will benefit people and teams involved in planning and decision making. On the basis of their pragmatic value in guiding decisions, needs assessments are used in various professions and settings from emergency rooms to corporate boardrooms to guide decision making. Nonetheless, although needs assessments have many different applications, in this book on needs assessments as they are applied in organizations to accomplish results, as opposed to their use in personal decisions or medical triage. This book, in turn, is guide to assessing needs and then making essential decisions about what to do next. This book filled with practical strategies, tools, and guides covers both large-scale, formal needs assessments and less-formal assessments that guide daily decisions. Included in the book is a blend of rigorous methods and realistic tools that can help make informed and reasoned decisions. Together, these methods and tools offer a comprehensive, yet realistic, approach to identifying needs and selecting among alternative ways as go forward. Sections one and two offer quick, yet full, answers to many frequently asked questions regarding how to make justifiable decisions. Next, section three examines a variety of tools and techniques that can be used for both collecting information and making decisions. Appendix A then offers a number of checklists and guides for managing the systematic assessment processes that lead to quality decisions. Finally, the reference list at the end of the book is a valuable resource to research, tools, and discussions of needs assessment.