Publication: Do Countries Learn from Experience in Infrastructure PPP?: PPP Practice and Contract Cancellation
Loading...
Date
2017-05
ISSN
Published
2017-05
Author(s)
Editor(s)
Abstract
Learning from experience to improve future infrastructure public-private partnerships is a focal issue for policy makers, financiers, implementers, and private sector stakeholders. An extensive body of case studies and "lessons learned" aims to improve the likelihood of success and attempts to avoid future contract failures across sectors and geographies. This paper examines whether countries do, indeed, learn from experience to improve the probability of success of public-private partnerships at the national level. The purview of the paper is not to diagnose learning across all aspects of public-private partnerships globally, but rather to focus on whether experience has an effect on the most extreme cases of public-private partnership contract failure, premature contract cancellation. The analysis utilizes mixed-effects probit regression combined with spline models to test empirically whether general public-private partnership experience has an impact on reducing the chances of contract cancellation for future projects. The results confirm what the market intuitively knows, that is, that public-private partnership experience reduces the likelihood of contract cancellation. But the results also provide a perhaps less intuitive finding: the benefits of learning are typically concentrated in the first few public-private partnership deals. Moreover, the results show that the probability of cancellation varies across sectors and suggests the relative complexity of water public-private partnerships compared with energy and transport projects. An estimated $1.5 billion per year could have been saved with interventions and support to reduce cancellations in less experienced countries (those with fewer than 23 prior public-private partnerships).
Link to Data Set
Citation
“Marcelo, Darwin; House, Schuyler; Mandri-Perrott, Cledan; Schwartz, Jordan. 2017. Do Countries Learn from Experience in Infrastructure PPP?: PPP Practice and Contract Cancellation. Policy Research Working Paper;No. 8054. © World Bank. http://hdl.handle.net/10986/26733 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Intergenerational Income Mobility around the World(Washington, DC: World Bank, 2025-07-09)This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.Publication The Impact of Trade Promotion Organizations on Exports(Washington, DC: World Bank, 2025-08-13)This paper examines the impact of trade promotion organizations on exports during the COVID-19 pandemic using a World Bank survey. The results suggest that increased trade promotion organization budgets significantly boosted exports during downturns but had no effect during the recovery phase. Interestingly, e-commerce programs adopted by trade promotion organizations negatively affected exports during downturns as they diverted resources away from productive support, especially for sectors not intensive in online trade. These findings suggest that countercyclical trade promotion organizations budgets may enhance trade resilience during similar global shocks.Publication The Future of Poverty(Washington, DC: World Bank, 2025-07-15)Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.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 Climate Vulnerability and Job Accessibility(Washington, DC: World Bank, 2025-08-11)Many developing cities are facing rapid population growth and extreme climate events. This paper examines the link between job accessibility and climate vulnerability, using data from Antananarivo, Madagascar, which frequently experiences flooding. As in other countries, the analysis finds that men’s commutes are longer than women’s, who tend to walk to work or use public transport. Even after controlling for observables and the potential endogeneity bias associated with commute time, the findings show that climate vulnerability negatively impacts wages, as people avoid commuting long to work due to anticipated potential climate risks. Building climate resilience into urban transport is therefore essential. As predicted by theory, the evidence also shows that the value of commuting is positive, and walking is disadvantageous. Motorized commuting yields higher returns, which could lead to overuse of private cars and taxis, posing decarbonization challenges.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Prioritizing Infrastructure Investment(World Bank, Washington, DC, 2016-05)Governments must decide how to allocate limited resources for infrastructure development, particularly since financing gaps have been projected for the coming decades. Social cost-benefit analysis provides sound project appraisal and, when systematically applied, a basis for prioritization. In some instances, however, capacity and resource limitations make extensive economic analyses across all projects unfeasible in the immediate term. This paper responds to a need for expanding the available set of tools for project selection by proposing an alternative prioritization approach that is systematic and feasible within the current resource means of government. The Infrastructure Prioritization Framework is a multi-criteria decision support tool that considers project outcomes along two dimensions, social-environmental and financial-economic. When large sets of small- to medium-sized projects are proposed, resources are limited, and basic project appraisal data (but not full social cost-benefit analysis) are available, the Infrastructure Prioritization Framework can inform project selection by combining selection criteria into social-environmental and financial-economic indexes. These indexes are used to plot projects on a Cartesian plane, and the sector budget is imposed to create a project map for comparison along each dimension. The Infrastructure Prioritization Framework is structured to accommodate multiple policy objectives, attend to social and environmental factors, provide an intuitive platform for displaying results, and take advantage of available data while promoting capacity building and data collection for more sophisticated appraisal methods and selection frameworks. Decision criteria, weighting, and sensitivity analysis should be decided and made transparent in advance of selection, and analysis should be made publicly available and open to third-party review.Publication Prioritizing Infrastructure Investments in Panama(World Bank, Washington, DC, 2016-04)Infrastructure services are significant determinants of economic development, social welfare, trade, and public health. As such, they typically feature strongly in national development plans. While governments may receive many infrastructure project proposals, however, resources are often insufficient to finance the full set of proposals in the short term. Leading up to 2020, an estimated US$836 billion - 1 trillion will be required each year to meet growth targets worldwide (Ruiz-Nunez and Wei, 2014; World Bank). Global estimates of infrastructure investments required to support economic growth and human development lie in the range of US$65-70 trillion by 2030 (OECD, 2006), while the estimated pool of available funds is limited to approximately US$45 trillion (B20, 2014). The past twenty years have also seen a shift towards decentralized infrastructure planning. Many subnational governments, regional entities, and sector agencies have been delegated responsibility for infrastructure planning promote local responsiveness, but responsibility for allocating funds often remains with a centralized finance agency (CFA). While constituencies may propose numerous projects, governments often have insufficient financial resources to implement the full suite of proposals. This report presents the IPF methodology and results of the pilot application to a select set of transport and water and sanitation projects in Panama. The report first gives background information on infrastructure prioritization in Panama, then follows with a description of the IPF in technical and implementation terms. Next, we present the results of the pilot and close with recommendations for implementing IPF to a wider set of projects.Publication Effects of Multilateral Support on Infrastructure PPP Contract Cancellation(World Bank, Washington, DC, 2016-07)This paper examines the relationship between multilateral support and contract cancellation in long-term infrastructure public-private partnerships. The analysis draws on a large data set and employs a multi-level econometric model to define propensity scores and matching estimators to compare rates of cancellation between projects with multilateral support and a comparison group of public-private partnership projects without multilateral support. The results suggest that multilateral support has a positive effect on the survival of long-term public-private partnership infrastructure contracts. Whereas observed the data suggest that multilateral support has no effect on cancellation rates, a quasi-experimental approach shows that the cancellation rate for projects with multilateral (6 percent) would have been about 48 percent higher without support from multilateral development organizations.Publication Prioritizing Infrastructure Investments(World Bank, Washington, DC, 2018-10)Governments worldwide face the difficult challenge of deciding which infrastructure projects to prioritize and select for implementation, given the limits of available funding and the need to attain their developmental goals. The key objective of this report is to conduct a comparative exercise between the World Bank's Infrastructure Prioritization Framework, a multicriteria analysis–based methodology to project prioritization, and a more complex cost-benefit analysis–based approach. The report focuses on Chile, which has a well-institutionalized evaluation process that uses cost-benefit analysis to assess projects on their quality and ability to generate value for money. The analysis compares the results of the Infrastructure Prioritization Framework alongside Chile's current cost-benefit analysis–based and multicriteria analysis approaches to the same subsets of projects in the road transport and water reservoir subsectors, respectively. The results show that the Infrastructure Prioritization Framework has application beyond its original proposition and can complement a traditional cost-benefit analysis by directly considering social and environmental policy goals that are otherwise difficult to quantify in a cost-benefit analysis. The analysis also finds that in Chile there is a discrepancy between the stated goals and objectives of the appraisal system and the actual implementation. In the case of transport sector projects, there is an evident deviation between cost-benefit analysis–based selection policy and actual decisions made for project implementation. In the case of water catchment selection, there is a bias toward projects with higher financial-economic performance as compared to social-environmental performance, despite policy intentions to afford consideration to environmental and social development goals.Publication Enhancing the Creditworthiness of Municipal Bonds : Innovations from Mexico(World Bank, Washington, DC, 2008-08)In 2001-03 the municipal bond market in Mexico was among the most active in the developing world. Government officials had found a way to dramatically enhance the creditworthiness of local government debt without using sovereign guarantees. The technique, adapted in part from private sector 'future flow' financing deals, enabled a state or local government to earn significantly higher credit ratings for bond issues than for its normal balance sheet debt. Many other developing countries have turned to Mexico as a source of innovation that may have application in their own markets.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication The Journey Ahead(Washington, DC: World Bank, 2024-10-31)The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.