Public-Private Partnerships in the New EU Member States

Public-private partnerships (PPPs) are popular around the world, in part because they allow governments to secure much-needed investment in public services without immediately having to raise taxes or borrow. Yet, PPPs pose a fiscal danger because a government's desire to avoid reporting immediate liabilities may blind it to future fiscal cost and risks. Although PPPs may not blemish governments' reported fiscal statements in the short term, they do create fiscal obligations. This increases fiscal vulnerability and can result in poorly-designed PPPs. The extent of the danger depends on the fiscal institutions that shape and constrain government decisions toward PPPs. Such fiscal institutions affect decision making incentives. Better fiscal institutions therefore can increase the change that PPPs will be well designed and appropriately used.Budina, Nina is the author of 'Public-Private Partnerships in the New EU Member States', published 2007 under ISBN 9780821371534 and ISBN 0821371533.