Institutional and Political Determinants of Private Participation in Infrastructure

40 Pages Posted: 12 Oct 2014 Last revised: 1 Jun 2015

See all articles by Marian W. Moszoro

Marian W. Moszoro

Warsaw School of Economics (SGH); International Monetary Fund (IMF); George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES)

Gonzalo Araya

Ministry Transport and Telecommunications of Chile

Fernanda Ruiz Nunez

World Bank

Jordan Schwartz

World Bank

Date Written: May 31, 2015

Abstract

We assembled a large panel of project-level technical and financial data as well as country-level economic, institutional, political, and governance variables to assess the determinants of private financing of infrastructure in emerging markets and developing economies. Controlling for economic characteristics, we find that overall private participation of infrastructure financing increases with freedom from corruption, rule of law, quality of regulations, and decreases with court disputes. We provide plausible explanations of deviations from this pattern when data are disaggregated at the sectoral level. We also found that legal systems --- types of democracy or dictatorship --- do not play a role in whether the private sector invests in infrastructure, but it increases with third-party government oversight, namely opposition party activity. Our results do not vary when controlling for income inequality and across quartiles of experience, country wealth, and per capita income. The study shows that upstream "enabling" institutions, policies, and regulations and sector economics need to be addressed simultaneously to facilitate private infrastructure investment financing.

Keywords: Private Participation in Infrastructure, Bureaucracy, Corruption, Regulation, Rule of Law

JEL Classification: D73, H54, L33, L51, R42

Suggested Citation

Moszoro, Marian W. and Araya, Gonzalo and Ruiz Nunez, Fernanda and Schwartz, Jordan, Institutional and Political Determinants of Private Participation in Infrastructure (May 31, 2015). Available at SSRN: https://ssrn.com/abstract=2508474 or http://dx.doi.org/10.2139/ssrn.2508474

Marian W. Moszoro (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

International Monetary Fund (IMF) ( email )

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

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Gonzalo Araya

Ministry Transport and Telecommunications of Chile ( email )

Amunategui 130
Santiago
Chile

Fernanda Ruiz Nunez

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jordan Schwartz

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
310
Abstract Views
1,736
rank
125,671
PlumX Metrics