Open Access BASE2020
Financing Costs and the Efficiency of Public-Private Partnerships
Abstract
The paper compares provision of public infrastructure via public-private partnerships (PPPs) with provision under government management. Due to soft budget constraints of government management, PPPs exert more effort and therefore have a cost advantage in building infrastructure. At the same time, hard budget constraints for PPPs introduce a bankruptcy risk and bankruptcy costs. Consequently, if bankruptcy costs are high, PPPs may be less efficient than public management, although this does not result from PPPs' higher interest costs.
Themen
Sprachen
Englisch
Verlag
Munich: Center for Economic Studies and Ifo Institute (CESifo)
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