PUBLIC–PRIVATE PARTNERSHIPS IN DEVELOPING COUNTRIES: CONCEPTS, CHALLENGES AND POLICY IMPLICATIONS

Public-Private Partnership (PPP) is a long-term contractual model in which the private sector assumes significant risk and management responsibility for public service or infrastructure delivery based on performance. This approach aims to utilize private sector cost-effectiveness and efficiency, while the public authority retains its responsibility as the guarantor of the service. Public services remain within the public regime; only the provider role is transferred to the private sector. Especially in developing countries where public finances are under pressure and financial constraints exist, PPP models support sustainability in critical areas like health by creating additional resources and institutional capacity without directly straining the budget. When designed correctly, these models offer the potential to expand access to services, improve quality, and transfer specific risks to the private sector. However, the success of PPP implementations depends strictly on the correct configuration of risk sharing, contract structure, and stakeholder communication, as well as governance quality, regulatory capacity, and strong political will. Policy inadequacies and a lack of viable projects can limit private sector participation, preventing the realization of expected gains.