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Bring something different to the table: potentials of public-private partnerships for Armenia and other developing/transition countries
Beilock, Richard and Grigorian, David A. and Reinartson, Yvonne |
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| There are many studies that show a positive relationship between the degree of privatisation and productivity, indeed international finance institutions and bilateral donor agencies gauge a nation’s progress in part by increases in the percent of all production accounted for by the private sector. Public sectors in developing and transition countries tend to be inefficient and corrupt relative to those in more developed countries, and tend to operate in spheres normally better served by the private sector. This paper argues, however, that there are cases in which public sector investment can lead to better outcomes than full privatisation. The two sectors, private and public, have different qualities and intensities of asset endowments, and it is out of such differences that mutually advantageous partnerships can be created. The authors note that while there can be significant benefits from public-private partnerships there are the dangers that in developing countries with weaker institutions business people may exploit the access to public officials and that such partnerships can give bureaucrats additional opportunities for corruption. The central example used is Armenia, one of the nations emerging from the Communist extreme of too much government involvement in the economy. |
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