The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road Ahead

Abstract

As numerous countries in Latin America
 and the Caribbean and elsewhere are moving toward a second
 phase of private participation in infrastructure programs
 mostly through public-private partnership schemes and other
 countries are just beginning the process, several concerns
 remain from the outcomes of the first phase. These concerns
 are making governments cautious in moving forward. The
 Impact of private sector participation in infrastructure
 addresses these concerns and brings clarity to the debate on
 the impact of private participation in infrastructure. The
 assessment of this impact may be one of the most emotional
 policy issues in economics, as it is clouded in a mist of
 myths, perceptions, and reality. This book analyzes the
 impact and sorts out the truth from the myths. The authors
 take a systematic and hard look at the facts (i.e., data) in
 Latin America, where starting in the late 1980s, many
 governments brought private sector participation into the
 delivery of essential utilities services. Although there are
 many assessments of this experience, none was able to rely
 on systemic, cross-country, and time-series data, and
 practically all of them did not save rare exceptions account
 for what would have happened in the absence of interventions
 (the counterfactual). This book does just that. It brings
 together an all encompassing database from the 1980s to the
 first decade of this century and develops an effective and
 robust methodology, accounting for the counterfactual, which
 tests and estimates the impact of reform on an exceptionally
 wide set of outcome indicators. As a result, this book
 presents the most in-depth study to date of the private
 sector participation experience in Latin America, and it
 substantially advances the existing literature by offering
 robust econometric analysis.