THE EFFECTS OF PUBLIC-PRIVATE PARTNERSHIP ON REGIONAL DEVELOPMENT AND INEQUALITY
Synopsis
Over the past three decades, Public–Private Partnerships (PPPs) have become an innovative governance instrument for financing and delivering public services. Mounting fiscal pressures, infrastructure needs, urbanization, and competitive dynamics have pushed governments beyond traditional finance. In this context, PPPs enable the state to retain its regulatory role while leveraging private finance and operational expertise. While infrastructure's positive growth effects are acknowledged, new economic geography highlights how transport and energy networks enhance accessibility, accelerate regional integration, and reshape the spatial distribution of economic activity. Thus, PPPs function not only as financing devices but also as strategic policy tools catalyzing regional transformation. However, their rapid diffusion has triggered debate. While PPPs may stimulate regional development and employment, the concentration of projects in high-demand corridors can amplify spatial inequality. Distributional effects are context-dependent: accelerated growth may reduce inequality, whereas high user charges and guarantee payments can adversely affect lower-income groups. This study outlines the historical evolution and objectives of PPPs, then examines their impacts on regional development and income distribution through conceptual discussion and empirical findings, offering recommendations for future policy design.
