Public-private partnerships: pro-cyclical or counter-cyclical? an empirical study

Abstract

The use of public works programs to combat economic recessions is a recurring issue. In this paper we conducted an empirical analysis covering 160 countries (out of which 43 were retained) over 30 years, to determine to what extent it has been possible in the past to deploy PPPs as part of a wider countercyclical policy. The main criterion used in the analyses performed is the comparison between numbers and values of PPP projects reaching financial close during recessions and those outside a recession. The results are disappointing: only a handful of European countries have been successful. The only sensible approach, that works only in some developed nations, would be increasing the number of PPP projects while maintaining project size. This research contributes to the understanding of PPP adoption during economic recessions, sheds light on the different strategies of developed and developing countries, and emphasizes the challenges and opportunities associated with implementing countercyclical PPP policies. These insights can inform policymakers, practitioners, and researchers in their decision-making processes and contribute to the advancement of knowledge in the field of PPP project procurement and management.

KEYWORDS:

• Public-Private Partnerships
• PPP
• countercyclical
• recession
• economic crisis

Disclosure statement

No potential conflict of interest was reported by the authors.