Public finances and Public Private Partnerships in the European Union

Alessandra Cepparulo, Giuseppe Eusepi and Luisa Giuriato

No 195, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: We analyse the Public Private Partnerships (PPPs) in order to account for their uneven distribution among the European Union countries and to identify the motivations of the public actor in selecting PPPs. We focus on the fiscal incentives to overcome budget and borrowing constraints, taking into account the political features and institutional frameworks of the countries. Using IMF data over the years 1990-2015, we confirm that the state of public finances impacts on the government’s choice of PPPs: more financially constrained governments find the PPP option attractive, while high-debt countries reduce the private investors’ interest in PPP. Fiscal rules increased the PPP bias in the pre-crisis period due to the possibility of off-balance accounting, while the post-crisis reform of the Stability and Growth Pact and the increased supranational and domestic surveillance seem to better discipline PPP employment. PPPs are, also, confirmed to be under the influence of political competition and government’s preferences for current expenditures.

Keywords: Public Private Partnerships; Fiscal illusion; Budget constraints; Fiscal rules (search for similar items in EconPapers)
JEL-codes: C23 E62 H54 L32 (search for similar items in EconPapers)
Pages: 27
Date: 2021-02
New Economics Papers: this item is included in nep-mac and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.dipecodir.it/wpsap/data/wp195.pdf (application/pdf)

Related works:
Working Paper: Public finances and Public Private Partnerships in the European Union (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sap:wpaper:wp195

Access Statistics for this paper

More papers in Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma
Bibliographic data for series maintained by Luisa Giuriato ().