The Effects of the Financial Crisis on Public-Private Partnerships

25 Pages Posted: 4 Aug 2009

See all articles by Maria Coelho

Maria Coelho

University of California, Berkeley, College of Letters & Science, Department of Economics

Philippe Burger

affiliation not provided to SSRN

Justin Tyson

International Monetary Fund (IMF)

Izabela Karpowicz

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2009

Abstract

The paper investigates the impact of the global financial crisis on public-private partnerships (PPPs) and the circumstances under which providing support to new and existing projects is justified. Based on country evidence, cost of and access to finance are found to be the main channels of transmission of the financial crisis, affecting in particular pipeline PPP projects. Possible measures to help PPPs during the crisis include contract extensions, output-based subsidies, revenue enhancements and step-in rights. To limit government's exposure to risk, while preserving private partner's efficiency incentives, intervention measures should be consistent with the wider fiscal policy stance, be contingent on specific circumstances, and be adequately costed and budgeted. Governments should be compensated for taking on additional risk.

Keywords: Credit risk, Cross country analysis, Financial crisis, Financial risk, Fiscal policy, Private sector, Public enterprises, Public investment, Public sector, Risk management

Suggested Citation

Coelho, Maria and Burger, Philippe and Tyson, Justin and Karpowicz, Izabela, The Effects of the Financial Crisis on Public-Private Partnerships (July 2009). Available at SSRN: https://ssrn.com/abstract=1442246 or http://dx.doi.org/10.2139/ssrn.1442246

Maria Coelho (Contact Author)

University of California, Berkeley, College of Letters & Science, Department of Economics ( email )

Berkeley, CA
United States

Philippe Burger

affiliation not provided to SSRN

No Address Available

Justin Tyson

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Izabela Karpowicz

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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