Public–Private Partnership: countries' attractiveness and the risk of project failure

The primary objective of this thesis is to analyse the public private partnership (PPP) framework for infrastructure development in developing countries across the six regions of the world. The thesis utilises the World Bank's private participation in infrastructure (PPI) dataset for the period 1980–2014, and examines three thematic areas. The first comprises of an exploratory analysis of the PPI dataset. The second research area focuses on the relationship between countries' attractiveness for PPPs and the characteristics of the countries, including: macroeconomic and market; fiscal constraints; regulatory and governance; and experience in PPPs, by utilising the Zero-Inflated Negative Binomial and Cragg's Double Hurdle models in an attempt to model private investors' decision to engage in PPPs as separate participation and consumption decisions. The third research area employs the methodology of survival analysis to investigate the risk of failure of PPP projects based on the allocation of residual facility ownership between the partners. The thesis's primary contributions include the utilisation of a wider and more informative range of econometric methodologies which have not been previously applied to the PPI dataset, and for the first time also, provides a framework to select an appropriate structure for PPPs that will enhance project survival. A key finding of the thesis is that private investors prioritise macroeconomic and market variables, such as price stability over regulatory and governance variables, such as corruption, in their determination as to which country to engage in PPPs. Contrary to previous research, corruption was found to be of no consequence to private investors who wish to engage in PPPs even for developing countries. Another key finding is that PPP projects which confer residual ownership on the public sector have lower risk of failure than those for which such ownership is conferred on the private sector. Evidence also suggests that the size of the project and the participation of multilateral institutions in PPPs also affect the risk of project failure.