Arbeitspapier

Financing costs and the efficiency of public-private partnerships

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.

Language
Englisch

Bibliographic citation
Series: SAFE Working Paper ; No. 295

Classification
Wirtschaft
Structure, Scope, and Performance of Government
National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
Bankruptcy; Liquidation
Subject
Public-Private Partnerships
Infrastructure
Financing Costs
Default

Event
Geistige Schöpfung
(who)
Avdiu, Besart
Weichenrieder, Alfons J.
Event
Veröffentlichung
(who)
Leibniz Institute for Financial Research SAFE
(where)
Frankfurt a. M.
(when)
2020

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Avdiu, Besart
  • Weichenrieder, Alfons J.
  • Leibniz Institute for Financial Research SAFE

Time of origin

  • 2020

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