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I think you're right. PPP model works when the Government doesn't have avenues of raising funds. In less developed countries, Governments often cannot raise mon

by pm90 8y ago

I think you're right. PPP model works when the Government doesn't have avenues of raising funds. In less developed countries, Governments often cannot raise money by imposing taxes or issuing bonds (or they can't to the tune required to fund such things). In wealthier nations, the funding is usually not an issue, the Governments are well functioning. I agree with you that these projects must be scrutinized very closely.

deleted 8y ago
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yholio 8y ago
The fundamental problem of any PPP is that a lot can go wrong or change in 20, 50 years. It's impossible to predict and anticipate future economic climate so both parts try to setup adversarial contracts where they are protected as much as possible. On the other hand, a private partner can always fold, go bankrupt, etc. while the state isn't going anywhere and it's obliged by law to abide by it's commitments. So this asymmetry almost guarantees a strong survivor bias towards very bad deals for the public. Except when everything goes exactly to plan for decades, PPPs tend to either fail or be detrimental to the public, by their innate nature. If we bring a bit of corruption into discussion in the initial tender phase, you get the full picture.