Public-Private Partnerships (PPPs) for Infrastructure Development in Developing Countries: A Case Study of Pakistan

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Abstract

During last quarter of the 20th century, public-private partnerships (PPPs) have emerged as a significant tool for infrastructure growth in developed countries under the aegis of the reforms agenda associated with policy framework of the new public management (NPM) aiming at improved efficiency, effectiveness and economic gains. Such partnerships are considered as a policy innovation in the case of the developed countries which has also been adopted in the case of the developing countries through a process of policy diffusion. This diffusion process is often perceived to be coercive in nature and is facilitated by international financial institutions (IFIs) / donor agencies which act as policy transfer agents for the developed countries. Despite such policy reforms and the growing need for social and economic infrastructure, PPPs have found limited applicability in the developing countries owing to their complex nature, inability to conform to local contexts and difficulties in satisfying divergent interests of stakeholders. In this context, current research is aiming at analysing the nature and process of diffusion of PPPs, local contextual factors and key drivers for adoption of PPPs in developing countries. Besides, critical success factors (CSFs) for PPPs in developing countries and stakeholder perceptions thereof are also being examined for implementation of PPP projects. For this purpose, a mixed research methodology was used to undertake a case study of PPPs in Pakistan employing semi-structured interviews and questionnaire survey for collecting qualitative and quantitative data. The thematic analysis of qualitative data tends to agree with the findings of the literature review that PPPs are a policy innovation of the developed countries which occurred under the influence of the NPM agenda and IFIs/ donors have a role to play in the diffusion of such reforms agenda into developing countries. But research findings suggest that endogenous factors (associated with local context) have more significance than exogenous factors (reflecting the role of IFIs/ donors and nature of diffusion process) towards influencing the policy adoption of PPPs in developing countries. Further, eight principal factors comprising of related CSFs have also been derived through quantitative data analysis reflecting the perceptions of all stakeholder groups involved in PPP projects. These factors included governance of PPP projects, the stakeholder engagement during the planning process, risk and financial management, enabling socio-economic environment, proactive stakeholder management during lifecycle of the PPP project, well developed legal framework, efficiency gains – trust and public acceptance, and affordability of service for the end users. A perception analysis for different stakeholder groups reveals that there is not much difference in perception of participants towards the level of significance of these CSFs from the perspective of a single stakeholder group, but for different stakeholder groups, the perception of stakeholders does vary. As the CSFs have been ranked differently for different stakeholder groups, a cumulative stakeholder perception index (SPI) has also been developed for a comparative review of significance of each CSF for different stakeholder groups

Keyword(s)

Critical Success Factors (CSFs); New Public Management (NPM); Policy Diffusion; Public-Private Partnerships (PPPs); Stakeholders Perception Index (SPI)

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