Certification Effects and Ownership Structure of Public-Private Partnership Projects

Abstract

This paper examines whether certification by government and development partners enhances private sector ownership in public-private partnership (PPP) projects. Based on a sample of 4,246 PPP projects for 37 developing countries from 1990 to 2012, we find government certification is not related to private sector ownership but development partners’ certification is; there is higher private sector ownership in PPP projects that receive greater support from development partners. However, having a prestigious development partner is immaterial to private sector ownership, suggesting that development partners are homogeneous in their ability to certify and support PPP projects. Among the different support measures provided by development partners, only guarantees, quasi- equity, and risk management are positively related to private sector ownership.

Keywords: private sector ownership; certification; public private partnership

JEL Classification: G14, G32, G31, L33