Political Competition and Private Participation in Infrastructure

25 Pages Posted: 13 Apr 2016

See all articles by Marian W. Moszoro

Marian W. Moszoro

Warsaw School of Economics (SGH); International Monetary Fund (IMF); George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES)

Gonzalo Araya

Ministry Transport and Telecommunications of Chile

Date Written: April 11, 2016

Abstract

We assembled a large panel of project-level technical and financial data, as well as country-level economic, institutional, and political variables to assess how political competition and policy insulation feasibility determine private participation in financing infrastructure in emerging markets and developing economies. Controlling for economic and institutional characteristics, we find that in parliamentary systems and in system where the rule of law is strong, an increase in political competition is associated with an increase in private participation in infrastructure through greenfield projects, concessions, and management contracts, but not in divestitures (privatizations). Our results support the hypothesis that political competition facilitates cooperation when insulation is costly or not viable.

Keywords: Private Participation in Infrastructure, Political Competition, Political Cooperation

JEL Classification: D73, H54, L33, L51, R42

Suggested Citation

Moszoro, Marian W. and Araya, Gonzalo, Political Competition and Private Participation in Infrastructure (April 11, 2016). Available at SSRN: https://ssrn.com/abstract=2763255 or http://dx.doi.org/10.2139/ssrn.2763255

Marian W. Moszoro (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

International Monetary Fund (IMF) ( email )

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

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Gonzalo Araya

Ministry Transport and Telecommunications of Chile ( email )

Amunategui 130
Santiago
Chile

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