The Effects Of Private Participation On Infrastructure

2024 Words Apr 28th, 2015 9 Pages
This paper examines the effects of private participation in infrastructure (PPI) in the developing world on the provision of infrastructure services. This process is colloquially referred to as privatization and involves the transfer of previously state-owned and operated infrastructure assets to operation and sometimes ownership by the private sector. Analysis of more than two decades worth of evidence showed that, in terms of the impact on infrastructure provision, PPI tends to provide positive gains in efficiency, quality of and access to infrastructure services. With regard to realizing the benefits of privatization, effective regulation and the introduction of competition are crucial. Notably, positive impacts from PPI are not seen equally among all infrastructure sectors. After a review of all of the impact measures this paper found that the case for PPI is strong in the telecommunications and electricity sectors, while in the water, sanitation and transport sectors the case is more ambiguous and should be rigorously evaluated on a case-by-case basis.

2. Motivation
The impetus for this choice of topic was provided by the article we read in class regarding the town of Cochabamba in Bolivia and its violent experience with the privatization of its water utility. Before deciding on this topic I was familiar with the vague outlines of the debate around privatization. Critics would vilify private companies for not having any moral motive beyond the profit motive, arguing…
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