Public-Private Partnership Development in Russia and Abroad: Issues and Solutions

Abstract

Abstract:The public-private partnership (PPP) model, which means long-term pooling of resources of public and private partners with agreed upon division of risks, responsibilities, and results between them, in order to solve important state tasks and/or implement infrastructure projects in the public interest, has been successfully used by many countries for the development of public infrastructure. In addition to direct economic effects, public-private partnership can have indirect effects, including a positive impact on institutional development, which is one of the key conditions for economic growth. In Russia, this form of cooperation between the state and private individuals holds great untapped potential. To analyze the ways in which it is used more actively the authors of the present article conducted an applied study aimed at identifying reasons for the state’s appeal to the PPP model, as well as the forms of interaction that preceded PPP in solving important state tasks. Success factors for this model of infrastructure development were identified as a result of thorough analysis of its implementation in advanced economies, on the one hand, and econometric analysis of the quality of infrastructure and infrastructure gap for a wider array of countries, on the other. An analysis of patterns of infrastructure projects launched under the public-private partnership scheme in Russia is presented, including regional and sectoral analysis of the use of PPP schemes. The study’s results allow identification of key areas of improvement needed in economic policy designed to increase the attractiveness of PPP for private investors and boost its economic effectiveness. Finally, the authors issue recommendations that take into account international experience.