Macroeconomics Effects of Private Sector Participation in Latin America's Infrastructure
The authors provide empirical evidence on the impact that private participation in infrastructure has had on key macroeconomic variables in a sample of 21 Latin American countries from 1985-98. Specifically, they look at the effects on GDP per capi...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/10/2040833/macroeconomics-effects-private-sector-participation-latin-americas-infrastructure http://hdl.handle.net/10986/19213 |
| Summary: | The authors provide empirical evidence
on the impact that private participation in infrastructure
has had on key macroeconomic variables in a sample of 21
Latin American countries from 1985-98. Specifically, they
look at the effects on GDP per capita, current public
expenditures, public investment, and private investment,
controlling for country effects and institutional factors.
The authors also investigate the relevance of the specific
contractual form of private participation contracts on these
variables and show differentiated effects according to
contract types. The results suggest that: 1) Private sector
involvement in utilities and transport have some, but not
impressive, positive effects on GDP per capita. 2) There is
some degree of crowding-out of private investment resulting
from greenfield projects in utilities, and delayed
crowding-in from concessions in transport. 3) There is
crowding-in of public investment by private participation in
utilities, while there is crowding-out by increased private
investment in transport. 4) Private participation in
utilities decreases recurrent expenditures, while in
transport it results in an increase. The net effect on the
public sector account is uncertain, but this uncertainty is
a major risk. The revelation of this risk may be the main
contribution of this paper since it is inconsistent with the
fiscal gains expected by many policymakers as they engage in
infrastructure privatization programs. |
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