Private and Public Financing of Infrastructure: Theory, International Experience and Policy Implications for Russia

Paul Welfens and Ekaterina Markova ()
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Ekaterina Markova: Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)

No disbei119, EIIW Discussion paper from Universitätsbibliothek Wuppertal, University Library

Abstract: This paper analyses the needs in infrastructure investment and the problems and options for private and public financing of these investments in the transition countries, especially in Russia. Insufficient progress in infrastructure reforms in Russia and the low degree of private participation provide special incentives for the investigation of this topic. Inadequate development of the Russian bank sector and domestic capital markets worsen the options for the domestic financing of long-term infrastructure investments. Foreign investment is also low due to macro and micro instability, higher risks, legislative weaknesses, and institutional constraints. Public financing of infrastructure through Public Infrastructure Programs is a partial solution to the financing problems of infrastructure projects, yet it would be wise to include private and international financing as well. The experiences of other transition countries have shown that these Private Infrastructure Programs - usually with a low fulfilment ratio - are not indispensable policy instruments to provide for long-term investment and are not automatically conducive to economic growth. Adequate infrastructure investment should contribute to sustainable economic growth of the country.

Keywords: Public and Private Financing; Infrastructure; Russia (search for similar items in EconPapers)
JEL-codes: L50 L97 P20 (search for similar items in EconPapers)
Pages: 42 Pages
Date: 2004-02
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Persistent link: https://EconPapers.repec.org/RePEc:bwu:eiiwdp:disbei119

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