The Effects of the Financial Crisis on Public-Private Partnerships

International Monetary Fund Paper No. 09-144

25 Pages Posted: 19 Sep 2009

See all articles by Justin Tyson

Justin Tyson

International Monetary Fund (IMF)

Izabela Karpowicz

International Monetary Fund (IMF)

Maria Coelho

University of California, Berkeley, College of Letters & Science, Department of Economics

Philippe Burger

University of the Free State

Multiple version iconThere are 2 versions of this paper

Date Written: September 18, 2009

Abstract

The paper investigates the impact of the global financial crisis on public-private partnerships (PPP's) and the circumstances under which providing support to new and existing projects is justified. Based on country evidence, cost of and access to finance are found to be the main channels of transmission of the financial crisis, affecting in particular pipeline PPP projects. Possible measures to help PPP's during the crisis include contract extensions, output-based subsidies, revenue enhancements and step-in rights. To limit government's exposure to risk, while preserving private partner's efficiency incentives, intervention measures should be consistent with the wider fiscal policy stance, be contingent on specific circumstances, and be adequately costed and budgeted. Governments should be compensated for taking on additional risk.

Keywords: Credit risk, Cross country analysis,Financial crisis, Financial risk, Fiscal policy, Private sector, Public enterprises, Public investment, Public sector, Risk management

Suggested Citation

Tyson, Justin and Karpowicz, Izabela and Coelho, Maria and Burger, Philippe, The Effects of the Financial Crisis on Public-Private Partnerships (September 18, 2009). International Monetary Fund Paper No. 09-144, Available at SSRN: https://ssrn.com/abstract=1475389 or http://dx.doi.org/10.2139/ssrn.1475389

Justin Tyson

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Izabela Karpowicz

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Maria Coelho

University of California, Berkeley, College of Letters & Science, Department of Economics ( email )

Berkeley, CA
United States

Philippe Burger (Contact Author)

University of the Free State ( email )

205 Nelson Mandela Drive
Park West
Bloemfontein, Free State 9300
South Africa

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