Governmental Support Strategies and Their Effects on Private Capital Engagement in Public-Private Partnerships

Original study by Yanbing Han & Hai (David) Guo

This paper examines the importance of government supports in facilitating PPP.  It identifies four main forms of government support and aims to answer the following question: which government support strategies, and in which combinations, are necessary and sufficient to attract high levels of private investment in PPPs?

The paper uses a general framework that bridges private investment with government support.  It reviews the main factors that motivate governments and the private sector to participate in PPPs.  These factors can be boiled down to the belief that PPPs have value-creating potential that wouldn’t be possible if participants worked individually.  The authors contend that the value creating potential of PPP legitimises government support that can mitigate private sector risk and affect the level of private sector involvement.

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