During the dry season, N. S. Reddy, a farmer in Kadapa district of Andhra Pradesh, cultivates groundnut on two acres using water from his own borewell, which he runs for the six hours every day that his village gets electricity. His neighbor, J. R. Prasad, owning a borewell of similar capacity, fully cultivates his single acre of land, but also sells water to A. R. Murthy to grow sunflower. At the end of the season, Mr. Murthy gives Mr. Prasad 3000 Rupees as payment on his contract for irrigating this half acre. In a different village, a similar scenario plays out, but here the borewell owner, K. Chandra, sells M. S. Krishna five irrigations, one-at-a-time throughout the season, at 1000 Rupees apiece.
To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?
It is a truism that infrastructure projects, like much else in life, do not unfold exactly as planned. However, there is little room for failure because it would affect a large number of users for which the government would be accountable.
India happens to be the largest laboratory of PPP projects and offers a plethora of evidence. While most projects have succeeded, some have faced failure mainly because they were encumbered by lack of conceptual clarity in policy formulation as well as contractual framework.
Many assert that all future events cannot be predicted and a PPP contract must, therefore, be regarded as incomplete. They need to be reminded that if man could succeed in sending a satellite to space and operate it for several years without any ability to modify it, why can’t this be done while launching an infrastructure project?
When the World Bank investigates and sanctions a major corporation for corruption related to one of its project, the deterrent impact is readily apparent. However, not every case the World Bank investigates is a major corruption case. In the past year, the World Bank Integrity Vice Presidency (INT) received many complaints related to fraud, and it is important to demonstrate responsiveness to complainants who report credible allegations as well as fix the weaknesses identified. Sanctioning cases of fraud also sends a strong message about abiding by high integrity standards in World Bank-financed projects.
Left unchecked, fraud erodes development effectiveness. It often coincides with poor project implementation, which can result in collapsing infrastructure or the distribution of counterfeit drugs. It causes costly delays and can lead to direct financial losses for countries which cannot afford it. Fraud also fosters a negative enabling environment, creating opportunities for more serious and systemic misconduct to occur.
In recent decades, many European countries have tried to instill greater labor market flexibility through increased use of fixed-term, temporary work contracts, as opposed to open-ended or permanent ones. The result has been dual labor markets, with temporary workers having fewer rights and job security than those on permanent contracts. One expert on the topic – Tito Boeri, Professor of Economics and Dean for Research at Bocconi University, Milan – stresses that temporary workers were especially hard hit during the Great Recession.
So what makes people do socially oriented tasks better? An interesting new paper by Nava Ashraf, Oriana Bandiera, and Kelsey Jack shows that money doesn’t matter and recognition makes a big difference.