Random readings on society, politics and change – Jorge Carrillo
PPPs received significant attention at the 3rd International Conference on Financing for Development in Addis Ababa and feature dominantly in the G20 platform as well as in the policy recommendations of many international financial institutions and organisations. In light of PPPs’ renaissance in the international policy discourse, especially among donors, pointing to their potential to generate new resources and increase efficiency for public service provision, a recent working paper of UN-DESA looks at the extant literature. Ironically, it finds that despite PPPs’ recent popularity, there is no common definition of PPPs, nor is there any internationally accepted accounting framework. While the lack of a common definition makes it difficult to evaluate PPPs performance, the absence of an internationally agreed accounting framework encourages recording of PPPs as off-budget activities and hence hides contingent fiscal liabilities. Furthermore, the extant literature overwhelmingly suggests that PPPs have often tended to be more expensive than the alternative of public procurement while in a number of instances they have failed to deliver the envisaged gains in quality of service provision, including its efficiency, coverage and development impact. In other words, they have failed to yield ‘value for money’ in its broadest sense taking into account not just the financial costs and efficiency gains deriving from a project but also its longer-term fiscal implications (including the risks of any contingency liabilities) as well as the broader welfare benefits for society such as the impact on poverty and sustainable development. To complicate the matter, most developing countries do not have the institutional capacity to create, manage and evaluate PPPs.
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