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Infrastructure Gap in South Asia : Infrastructure Needs, Prioritization, and FinancingIf the South Asia region hopes to meet its development goals and not risk slowing down or even halting growth, poverty alleviation, and shared prosperity, it is essential to make closing its huge infrastructure gap a priority. Identifying and addressing gaps in the data on expenditure, access, and quality are crucial to ensuring that governments make efficient, practical, and effective infrastructure development choices. This study addresses this knowledge gap by focusing on the current status of infrastructure sectors and geographical disparities, real levels of investment and private sector participation, deficits and proper targets for the future, and bottlenecks to expansion. The findings show that the South Asia region needs to invest between US$1.7 trillion and US$2.5 trillion (at current prices) to close its infrastructure gap. If investments are spread evenly over the years until 2020, the region needs to invest between 6.6 and 9.9 percent of 2010 gross domestic product per year, an estimated increase of up to 3 percentage points from the 6.9 percent of gross domestic product invested in infrastructure by countries in the region in 2009. Given the enormous size of the region's infrastructure deficiencies, it will need a mix of investment in infrastructure stock and supportive reforms to close its infrastructure gap. One major challenge will be prioritizing investment needs. Another will be choosing optimal forms of service provision, including the private sector's role, and the decentralization of administrative functions and powers.
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The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road AheadAs 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.
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Sovereign Wealth Funds and Long-Term Development Finance : Risks and OpportunitiesSovereign wealth funds represent a large
 and growing pool of savings. An increasing number of these
 funds are owned by natural resource exporting countries and
 have a variety of objectives, including intergenerational
 equity and macroeconomic stabilization. Traditionally, these
 funds have invested in external assets, especially
 securities traded in major markets. But the persistent
 infrastructure financing gap in developing countries has
 motivated some governments to encourage their sovereign
 wealth funds to invest domestically. This paper proposes
 some basic elements of a conceptual framework to create a
 system of checks and balances to help ensure that the
 sovereign wealth funds do not undermine macroeconomic
 management or become a vehicle for politically driven
 "investments." First, the risks and opportunities
 of domestic investment by sovereign wealth funds are
 analyzed. Central issues are the relationship of sovereign
 wealth fund financing to the budget process and to the
 procurement systems of sector ministries, as well as the
 establishment of appropriate benchmarks and safeguards to
 ensure the integrity of investment decisions. The paper
 argues that a well-governed sovereign wealth fund, with a
 sound mandate and professional management and staffing, can
 possibly improve the quality of the public investment
 program. But its mandate should not duplicate that of other
 government institutions with investment mandates, such as
 the budget, the national development bank, the investment
 authority, and state-owned enterprises. Establishing rules
 on the type of investment (for example, commercial and/or
 quasi-commercial) and its modalities (for example, no
 controlling stakes, leveraging private investment) is one
 way to ensure separation between the activities of the
 sovereign wealth fund and those of other institutions. The
 critical issue remains that of limiting the sovereign wealth
 fund's investment scope to that appropriate for a
 wealth fund. If investments that generate quasi-market
 returns are permitted, the size of the home bias should be
 clearly stipulated and these investments should be reported separately.