Public-Private Partnership: An International Perspective. International Monetary Fund Policy Discussion Paper

This Policy Discussion Paper should not be reported as representing the views of the IMF. The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Policy Discussion Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Prompted by tight budget constraints and by the desire to raise efficiency, governments around the world have increasingly delegated the provision of a variety of infrastructure services to the private sector. Involving the private sector, however, raises difficult legal and regulatory issues: public-private partnerships (PPPs) are more complex, entail longer-term arrangements than seen in traditional public procurement. This paper discusses four key questions: (i) What are the main legal issues that need to be addressed in order to create a favorable environment for PPPs, and how have these been tackled in various countries?; (ii) What are the possible ways for managing conflicts between private and public partners?; (iii) What are the most appropriate forms of incentives the government should use to attract private investors?; and (iv) How should government guarantees be managed and disclosed