Policy and Operations Evaluation

Department (IOB)

Results Measurement in

Public-Private Partnerships

IOB Study # 378 - Systematic Literature Review

Public-private partnerships in developing countries

Prof. dr. Ruerd Ruben, Director

Policy & Operations Evaluation Department (IOB)

Ministry of Foreign Affairs

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Outline of Presentation

• Systematic literature review (MSSM levels)

• What can be considered to be a Public-Private partnership?

• What is the intervention logic of PPP’s?

• Which results are registered from PPP’s?

• What are critical succes factors of PPP’s?

• Conclusion & Outlook

Definition of PPPs

PPP's in developing countries; IOB study

‘Form of cooperation between government and business agents – sometimes also involving voluntary organizations (NGOs, trade unions) or knowledge institutes – that agree to work together to reach a common goal or carry out a specific task, while jointly assuming the risks and responsibilities and sharing resources and competences’

Wide variety in contractual terms: ● service contracts, management contracts

● lease arrangement● build–transfer–operate (BTO) and similar

arrangements (BOO, DBO, DBGO, DBFMO, etc). ● joint ventures

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Dutch spending on PPPs (2011)

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Review approach

1. Keyword search 1433 studies found2. Title and abstract check +3. Assesment general characteristics 81 studies4. Quality check (validity and reliaibilty) 47: 18 cases +

29 reviews

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Overview (by region & sector)

Regional coverage:Asia: 19 (case studies: 10 / reviews: 9)Afrika: 11 (case studies: 4 / reviews: 7)Latin America: 4 (case studies: 1 / reviews: 3)

Sectors:Healthcare: 14Infrastructure: 7Water: 5Agriculture: 4

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Key criteria of PPPs

1. Cooperation between public and private party

2. Clear agreement on goals

3. Combination of private and public funding

4. Agreement on sharing resources and tasks

5. Distribution of risk between partners

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Character of Developmental PPPs

Rationale for PPPs

Alternative framwork for dealing with coordination problems, input constraints and output risks

Motives:Most important: financial resource mobilization

Least important: effectiveness of the partnership (scarce results orientation)

PPP's in developing countries; IOB study

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Results (output & outcome level)

Output Outcome

Positive 13 7

Mixed - 1

Negative - 1

No effect 2 -

No data 3 9

Total 18 18

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Critical success factors (1)

1. Permanent government involvement- Set standards and monitor product safety,

efficacy and quality- Assure citizens access to products and services

2. Sound regulatory framework- Private partner protected from expropriation,

arbitration of disputes- Respect for contract agreements and legitimate

recovery of costs and profits

Based on: Jamili (2004)

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3. Formation requirements- From the very start create clarity about:

inputs, committment symetry - Common goals, intensive communication,

working cultures

4. Partner selection (4 C’s)- Compatibilty: complementary strengths - Capabilty- Commitment- Control

Critical success factors (2)

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Critical success factors (3)

5. Common vision and trustfull relationship- Hold-up problem caused by change in the

position of partners- Cultural differences between partners

6. Interest of key participants negotiated and packaged

- Traditional ways of working independently have limited impact

- Long-term interests of partners are balanced

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Public sector comparator

Net savings PPP: $ 9 mln = 7% VfM

PPP's in developing countries; IOB study

PPP Transaction costs

Outlook

PPP's in developing countries; IOB study

Are PPP’s a good proposition ?

- Yes, can be- But: many ‘incomplete contracts’- Only for specific purposes- Be aware of critical succes factors – success

is not always assured!- Evidence on effectiveness & efficiency so far

is quite weak

Thanks for your attention

PPP's in developing countries; IOB study

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