Introduction: PPPs – theoretical challenges and directions forward

Abstract

We do not subscribe to a goal of unconstrained development for its own sake; but assuring an adequate supply of civic infrastructure (including housing, roads and public transport, power, water supply and sanitation) is essential to meet the needs of developing countries where populations are growing and becoming more urbanized, as well as those of developed countries where infrastructure is aging and in need of repair and/or replacement. Important as it is, however, providing the necessary infrastructure confronts severe difficulties. Governments of emerging market countries face enormous shortfalls in financial and governance capacity in delivering sorely needed new infrastructure for their growing populations. At the same time, financially strapped governments of mature market economies are struggling to upgrade and retrofit their aging and obsolete infrastructure. Societies at both ends of the development spectrum need more robust project governance structures that can enable new forms of financing coupled with improved systems of managerial oversight and control. Infrastructure is central to societal welfare, and the high cost of replicating the “last mile of pipe or wire” often requires a monopolistic state provision or regulated private provision strategy. We would thus ordinarily expect that the state would play a major role in its prioritization, funding, development and operation. However, historically this has not always been the case. Specific countries vary in their experience, but the United States (US) is not atypical. As Miller and Floricel (2000) point out, during much of the nineteenth century US transportation systems and power networks were built by private entrepreneurs, with minimal public involvement. Toward the end of the century, large corporate groups replaced the entrepreneurs but still experienced only modest public oversight. However, during the Progressive era of the early twentieth century, private initiatives were increasingly regulated and, over time, nationalized as public