Policy and Operations Evaluation Department (IOB) Results Measurement in Public-Private Partnerships IOB Study # Systematic Literature Review Public-private partnerships in developing countries Prof. dr. Ruerd Ruben, Director Policy & Operations Evaluation Department (IOB) Ministry of Foreign Affairs

2 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

4 Dutch spending on PPPs (2011)

5 Review approach 1. Keyword search  1433 studies found 2. Title and abstract check + 3. Assesment general characteristics  81 studies 4. Quality check (validity and reliaibilty)  47: 18 cases + 29 reviews

6 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: 14 Infrastructure: 7 Water: 5 Agriculture: 4

7 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

8 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

10 Results (output & outcome level) OutputOutcome Positive137 Mixed-1 Negative-1 No effect2- No data39 Total18

11 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)

12 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)

13 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

14 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