How public-private partnership projects impact infrastructure industry for economic growth

Abstract

Purpose

Public-private partnership (PPP) is mutually beneficial relationships that are formed between the public and private sectors. The private-sector partner typically makes a substantial equity investment, and in return the public sector gains access to new or improved services. When properly vetted and structured, PPP allocate risk to the party best suited to handle it. The purpose of this paper is to examine the relationship between the scale and nature of the PPP's contribution as a driver of the economic growth and gross domestic product (GDP).

Design/methodology/approach

Using statistics causality modeling and relevant statistical techniques, the dynamic interactions and interdependencies over PPP and economic growth were addressed and quantified.

Findings

Although PPP can free up government resources for other public priorities, three key factors enable PPP to stimulate a country's economic growth: the number of PPP projects under way, the value of PPP projects, and the ideal type of PPP contracts in use.

Originality/value

The number, value, and type of PPP, combined with supportive policies, power economic growth. Governments with well-established and enforced policies against corruption, combined with low business transaction costs, a transparent legislative system, and exchange rate and monetary stability are far more attractive to the private sector.

Citation

Zangoueinezhad, A. and Azar, A. (2014), "How public-private partnership projects impact infrastructure industry for economic growth", International Journal of Social Economics, Vol. 41 No. 10, pp. 994-1010. https://doi.org/10.1108/IJSE-04-2013-0083