Financing costs and the efficiency of public-private partnerships
Besart Avdiu and
Alfons Weichenrieder
No 295, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE
Abstract:
The paper compares provision of public infrastructure via public-private partnerships (PPPs) with provision under government management. Due to soft budget constraints of government management, PPPs exert more effort and therefore have a cost advantage in building infrastructure. At the same time, hard budget constraints for PPPs introduce a bankruptcy risk and bankruptcy costs. Consequently, if bankruptcy costs are high, PPPs may be less efficient than public management, although this does not result from PPPs' higher interest costs.
Keywords: Public-Private Partnerships; Infrastructure; Financing Costs; Default (search for similar items in EconPapers)
JEL-codes: G33 H11 H54 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cfn and nep-tre
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https://www.econstor.eu/bitstream/10419/226213/1/1739027736.pdf (application/pdf)
Related works:
Working Paper: Financing Costs and the Efficiency of Public-Private Partnerships (2020)
Working Paper: Financing Costs and the Efficiency of Public-Private Partnerships (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:295
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