PSD Blog - The World Bank Group

Involving the public in public private partnerships

Call them taxpayers, citizens, or just simply the public—they are the reason why public private partnerships (PPPs) are created. They are the users and the ultimate financiers, whether by paying taxes or tolls, and they want to have a bigger role in decisions about what infrastructure shall be built and how. It’s no surprise that public opinion is the ultimate judge of the success of PPP projects.

And this ultimate judge is not always just; it does not always have the right information at the right time. It’s up to fallible public sector officials to ensure that proper information and reporting is available to the public and that proper stakeholder consultations take place prior to key decisions regarding the project.

Big guy, little guy: Who suffers more from crime?

At first you might guess that it’s the big firms that make an easy target. But we need to do more than guess—the policy implications are quite different if the answer is “big” or “small.” If large firms are more efficient and do more R&D and export to other countries, then crime can be more harmful to the economy when directed against such firms. However, compared with large firms, wages and profits may be lower in the smaller firms. Crime directed against small firms can therefore be regressive (causing more harm to the relatively worse-off).

It turns out that getting to the bottom of this question requires drawing a careful distinction between two concepts: the incidence and burden of crime.

Doing Business in India

If you wanted to start a business in India, what city would you pick? The just-released report Doing Business in India 2009 has an answer: Ludhiana. Hyderabad and Bhubaneshwar would also be good choices. Why? These were ranked as the top three cities in India (out of 17 included in the ranking) in the overall ease of doing business. 

Celebrating failure

When oh when will we get the development version of Failcamp?

As I wrote previously, it seems to me that the development sector needs fewer "lessons learned" documents - fully polished and sanitised so that they read more like PR pieces - and more honest, "raw" conversations about what worked, and, most importantly, what didn't.

Charting a path out of the crisis

Editor's Note: Costas Stephanou is a senior financial economist in the Financial and Private Sector Development Vice Presidency of the World Bank Group.

The World Bank Group (WBG) has just released the first batch of a series of policy briefs on the financial crisis, whose aim is to assess government responses to the crisis, shed light on the financial reforms currently under debate, and provide insights for emerging-market policy makers. The first three papers cover a lot of ground in a short amount of space—sizing up the global policy response, forecasting what future financial systems will look like as a result of these policy responses, and determining how financial regulation will evolve. They will be followed by papers, written by different authors inside and outside the WBG, which will take ‘deep dives’ in specific crisis-related financial sector topics.

• Dealing with the Crisis: Taking Stock of the Global Policy Response provides an overview of the immediate financial sector policy responses to the financial crisis—including emergency liquidity support, expansion of financial safety nets, and interventions in financial institutions—that have succeeded in stemming widespread panic. But the effort has generally been ad hoc and insufficient. Issues that remain include the resolution of problem assets, the restructuring of troubled, systemically important financial institutions, and the development of credible exit strategies. Only a handful of countries have attempted to tackle these issues head-on. As past experience has shown, that may well have negative repercussions for the duration and strength of a subsequent recovery.

What can the London Underground tell us about PPPs?

If you’ve ever been to London, then you’ve almost certainly seen the emblematic red circle and blue stripe with the word UNDERGROUND emblazoned on it. The Underground is a huge operation, made up of some 270 stations and 400km of track. So how does London keep this operation running?

Earlier this decade, the government experimented with a public-private partnership (PPP) under the name of Metronet. The hope was to generate efficiencies by bringing in the private sector. So did it work? A recent report by the UK National Audit Office (published 5 June 2009) makes it pretty clear the answer is "no." The report pinned responsibility for this failure on poor corporate governance:

Reframing the debate

Benito Arruñada is guest blogging at Organizations and Markets. His first post states:

One of my recent research areas is the cost of business formalization. In particular, I have criticized the World Bank’s Doing Business project for the narrow focus of its “Starting a Business” indicator on reducing the initial costs of incorporating companies (Arruñada, 2007,  2009), which disregards the more important role of business registers as a source of reliable information for judges, which is essential for reducing transaction costs in future business dealings.

New Blogger: Filip Drapak

Public Private Partnership—so often the center of attention and so often misunderstood. Is it a method of public procurement of infrastructure or a tool to mobilize private finance for public infrastructure? Is it capable of transferring risks to the private sector or taking advantage of advanced performance management? And does it deliver value for money to taxpayers or “juicy” deals to rent seeking private companies—these are some of the questions we shall ask in this blog. We'll also look at what is going on in the market, how the financial crisis has affected PPPs, and what the most recent developments are in this field around the globe.

I've invited Filip Drapak, former Chairman of the Czech Republic PPP Centrum, to comment on these issues. Filip joined the World Bank Institute in 2007 to work as a Senior Specialist in the Public-Private Partnerships in Infrastructure practice.

Filip brings over 14 years of experience in finance, economics and banking. For the past 5 years, he has focused almost exclusively on public private partnerships, developing government policies and legislation, setting up institutional support for PPP and supporting the management of pilot projects. Welcome!

China's Venture Capital Markets: Nascent, but growing

Editor's Note: Brian Hoyt is a consultant with the Financial and Private Sector Development Vice Presidency of the World Bank Group.

The World Bank recently held a workshop on Closing the Private Equity Gap that discussed how government policy can nurture the growth and sustainability of emerging market private equity. Venture capital investments play an important role in filling the early stage funding gap, and China is one of the world's largest emerging markets for venture capital (VC).

Last May, the Bank released a report, Promoting Enterprise-Led Innovation in China, which gives an overview of the Chinese VC market, whose investments have grown from $764m to $3.88bn between 2003 and 2007. In order to mantain this growth, the report calls on the Chinese governement to continue building its venture capital infrastructure:

The smart economics of educated women

Editor's Note: Jennifer Yip is a consultant for the World Bank Group's Doing Business team.

At an age when mothers admonish their children to finish their brussels sprouts, my mother issued warnings about the importance of getting a PhD if I wanted to gain the respect of my future husband. Those warnings were followed by the oft-repeated reminder that I should "marry well, so you don’t have to work if you don’t want to."

Twenty years and a couple of degrees later I’ve often wondered how those two pieces of advice go together. What is the point of getting an advanced degree if I eventually decide not to work?