Deriving Macroeconomic Benefits from Public–Private Partnerships in Developing Asia

30 Pages Posted: 22 Feb 2019

See all articles by Minsoo Lee

Minsoo Lee

Asian Development Bank

Xuehui Han

Asian Development Bank

Raymond Elizarde Gaspar

Asian Development Bank

Emmanuel Alano

Asian Development Bank

Date Written: August 7, 2018

Abstract

The provision of infrastructure and related services in developing Asia via public–private partnership (PPP) increased rapidly during the late 1990s. Theoretical arguments support the potential economic benefits of PPPs, but empirical evidence is thin. This paper develops a framework identifying channels through which economic gains can be derived from PPP arrangement. The framework helps derive an empirically tractable specification that examines how PPPs affect the aggregate economy. Empirical results suggest that increasing the ratio of PPP investment to GDP improves access to and quality of infrastructure services, and economic growth will potentially be higher. But this optimism is conditional, especially on the region’s efforts to further upgrade its technical and institutional capacity to handle complex PPP contracts.

Keywords: developing Asia, economic growth, infrastructure, poverty reduction, public–private partnership

JEL Classification: H54, O11, O18, O47

Suggested Citation

Lee, Minsoo and Han, Xuehui and Gaspar, Raymond Elizarde and Alano, Emmanue, Deriving Macroeconomic Benefits from Public–Private Partnerships in Developing Asia (August 7, 2018). Asian Development Bank Economics Working Paper Series No. 551 (August, 2018). Available at SSRN: https://ssrn.com/abstract=3339098 or http://dx.doi.org/10.2139/ssrn.3339098

Minsoo Lee (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Xuehui Han

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Raymond Elizarde Gaspar

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Emmanue Alano

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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