public-private partnerships

Fixing Fraud in Public-Private Projects

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What’s a cash-tight government to do when it wants to modernize a hospital, build a railway, or expand the power grid to reach underserved areas? It might explore outside, private sources of financing—that’s where public-private partnerships (PPPs) come in. The acronym has a promising ring to it, yet going back to the 1970s, its impact has been mixed. At their best, PPPs can provide rapid injections of cash from private financiers, delivery of quality services, and overall cost-effectiveness the public sector can’t achieve on its own.

But at their worst, PPPs can also drive up costs, under-deliver services, harm the public interest, and introduce new opportunities for fraud, collusion, and corruption. Our experience at the World Bank Integrity Vice Presidency is that because PPPs most often are geared toward providing essential public services in infrastructure, health and education, the integrity risks inherent in these sectors also transfer to PPPs.

On April 17, the Integrity Vice Presidency convened a public discussion on corruption in PPPs (pdf) bringing together finance, energy, and fairness-monitoring perspectives. Looking at the landscape, in the last eight years, 134 developing countries have implemented PPPs in infrastructure, and in the last decade the World Bank has approved some $23 billion lending and risk guarantee operations in support of PPPs.

Davos 2013: A Thief Stealing Bells Is Not an Optimist

For the past five years, the participants to the Annual Meetings of the World Economic Forum (WEF) have gathered in Davos to discuss urgent global crises the world was facing: subprime lending, the credit crunch, banking, Greece, the euro zone’s woes, and so on. Soul-searching about the political and economic status quo ensued. This year, with leadership transitions in the two largest economies completed, the euro zone no longer facing imminent break-up, and China growing at 7.8%, Davos resumed some normalcy. Some even claimed optimism.

Some of the optimism is based on the growth prospects in Asia and China. For the past five years, while Europe has not grown at all, Chinese GDP has grown 60%. In this year’s Davos, there were no fewer than five public sessions on China, with topics ranging from its rapid growth, transformation of its growth model, and emergence of its soft power. Interests in Asia are high.

A WISE Focus on Innovative Solutions to Ensure Learning

Harry Patrinos @ WISE 2012 Last week, I had the honor of being part of the fourth World Innovation Summit for Education (WISE), in Doha. Pratham, the recipient of the 2012 WISE Prize for education, was praised as a renowned leader in the field of education for providing innovative, low-cost solutions for mass literacy and numeracy in developing countries. Pratham’s CEO and co-founder, Madhav Chavan, received the award, which recognizes “world-class” contributions to education.

While in Doha, I had the pleasure of being part of a WISE panel debate with Mr. Chavan, which also included Financial Times correspondent Chris Cook and Dr. Talal Abu-Ghazaleh. Anver Versi, editor of African Business and African Banker, was the moderator. During this panel, we discussed innovative financing and the role of public-private partnerships in education. Mr. Chavan began his remarks stating that, “Education is too important to be left to governments alone.”

Sustainable Development: the Business-class Train Has Left the Station and the Canary is in the Coal Mine

Last week, MIGA hosted a panel discussion on the role of the private sector in sustainable growth as part of the World Bank Group’s Sustainable Development Network Forum 2012. Taking the initiative as an agency of the World Bank Group that encourages investment by the private sector, MIGA brought this angle to the more general sustainable growth discussion.

Keynote speaker Jeffrey Leonard from the Global Environment Fund opened citing the World Bank President’s remarks on sustainable development that were right on the money – outlining an urgent need for attention to the matter, noting that resources must be made available – yes, good, onward! The catch? They were attributed to a president who left office 25 years ago (Tom Clausen).

What We Can Learn from Innovative Schools that Cater to the Poor

Governments across both the developing and developed world are experimenting with private management of public schools to better serve the poorest, and most under-served students. But have recent innovations lived up to their promise of improved results?

The verdict from a recent review of America’s ‘charter schools’—the most rigorous analysis of privately-managed schools to date—suggests some cause for optimism, at least at the middle school level. What is more, recent studies show that successful ideas from the private sector can feed back into the public sector to improve education for all.

Education for All: How We Can Leverage the Non-State Sector to Reach Our Goals

Many have argued this past week for an increased financial boost to achieve the education Millennium Development Goals -- universal primary completion and gender parity in education. But what should spending focus on, and how can we get the best from both public and private financing?

Not only are we missing the mark in terms of the MDGs for education – currently 69 million children of primary age are out of school, but this is only part of the story. Millions of children drop out early every year, and many of those who do graduate are still not mastering the basic skills in reading and math that are necessary to help them find gainful employment. As we scale up efforts, we must leverage the resources and participation of all, including private and non-state actors, to help reach these goals.

Can the Private Sector Play a Helpful Role in Education? It Can, If it Targets Disadvantaged Students

The following piece appeared as a guest blog in the UK's Guardian this past week.

Students from Harlem Childrens' Zone with its president, Geoffrey Canada. A good public education system means public spending – but not necessarily public provision.

In OECD countries, more than 20% of public education expenditure goes to private institutions – communities, non-governmental organisations (NGOs), faith-based organisations, trade unions, private companies, small informal providers and individual practitioners – and about 12% is spent on privately-managed institutions.

But does private participation mean higher quality education? Does it bring better exam results? Can it encourage greater equality?

How the Private Sector Can Help Achieve Learning for All

The World Bank Group’s new Education Strategy 2020 champions learning for all and recognizes that global progress towards this goal will require the commitment of all actors – including governments, communities and private entities. The strategy acknowledges the vital role the private sector can play in helping expand and improve educational opportunity. Private sector participation in education is a growing part of education systems and has helped make significant educational advancements possible in many countries.

How can we leverage the valuable contributions of the private sector to help realize the goal of Learning for All?

Latin America: more public-private partnerships needed to improve infrastructure

Latin America: more public-private partnerships needed to improve infrastructure

There are three people in Latin American and the Caribbean who care about Public-Private Partnerships or PPPs as they’re widely known. You may have met them. You might even be one. In case not, let me introduce you...

First and foremost, please meet Madame Minister of Finance. She’s busy, she’s stressed and she’s always balancing two concerns that run counter to each other, at least in the short run: growth and budget. Private investment in services might help one without hurting the other.

Chasing the Wind

MIGA recently sponsored its seventh symposium on political risk issues, in tandem with Georgetown University’s School of Foreign Service. We happily note that the symposium has established itself as the world's leading forum for cutting-edge assessments of the international political risk management industry, and this year it did not disappoint. A summary of the event is here.

I’ll concentrate on one trend that was noted clearly from the political risk insurance (PRI) providers, like MIGA, that were in attendance. All agreed that, since the international financial crisis, new business has mostly taken the form of obligor default products. For the PRI industry, an obligor is a country; this product is used when there is some sort of an agreement by which a government has financial payment obligations or guarantees with an investor. The product is suitable for certain types of transactions, for example public-private partnerships or power purchase agreements.

Seize the Moment: Now’s the time to reform rural health care in India

The blog I have posted reflects my personal views and not those of the World Bank or its affiliates. It is unfortunate that some parties have sought to interpret what I written as the official views of the World Bank. The blog platform is intended to generate a healthy discussion. The comments that the blog attracted shows differing opinions on the subject of public and private roles in health care.

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