The Pros and Cons of Public-Private Partnerships (PPPs) as a means to achieve food security, expanded infrustructure investment and green growth

Part I of this paper was commissioned by the Matias Romero Institute of the Mexican Ministry of Foreign Affairs as a background paper for an on-line forum during the week of September 3-7, 2012 for the Mexican Foreign Service.  The author moderated the forum on September 6 on the question of the “pros and cons of PPPs.”  Part II describes the understanding of the author/moderator of the conclusions of the on-line discussion of PPPs. 

The intention of the Forum was to assess the outcomes of the Mexican G20 Summit and the implications for the future. 

In Part I, the author describes new PPP initiatives of the G20 and Business 20, such as the Green Growth Action Alliance.  In its formal Declaration at Los Cabos, the G20 welcomed this Alliance of the Business 20 (B20, which aims to dramatically increase the use of public resources (e.g., development assistance, taxes) to leverage private investment in key sectors.  In addition to the Alliance, the G20 is promoting PPPs through other channels (e.g., the G20 Development Action Plan, the G20 High-Level Panel on Infrastructure).

In Part II, the author/moderator recaps the on-line discussion.  The following questions were discussed:

1.      SHOULD THERE BE PRE-CONDITIONS FOR IMPLEMENTING PUBLIC-PRIVATE PARTNERSHIPS (PPPs)? For instance, should PPPs focus more on economic sectors (e.g., transportation) than social sectors (e.g., health, education)? Or, more on sectors in which there is more competition (e.g., telecoms) rather than less (e.g., water)?  Should good governance, including a solid regulatory framework, be a precondition for PPPs in order to prevent corruption or advance sustainable development?  Should communities affected by prospective PPPs participate in determining their feasibility and design of PPPs?

2.      SHOULD PPPs BE DESIGNED IN ORDER TO ACHIEVE A “TRIPLE BOTTOM LINE” (i.e., economic, social and environmental co-benefits) AND, IF SO, HOW? The idea is that, if public resources are used to leverage private investment, then it should be possible to identify how (and to what extent) the public resources achieve social and environmental co-benefits. How might this be accomplished?

3.      WHAT IS YOUR OPINION OF THE CRITERIA FOR INFRASTRUCTURE PPPs PROPOSED BY THE G20’S HIGH LEVEL PANEL ON INFRASTRUCTURE? The six proposed criteria (e.g., whether they promote regional integration) are cited in the report of the High Level Panel (http://www.g20-g8.com/g8-g20/root/bank_objects/HLP_-_Full_report.pdf) on page 13. To what extent are these goals likely to help achieve a goal of the G20 Mexican Presidency: “sustainable development, green growth, and the fight against climate change.”