World Bank Releases Model Public-Private Partnership Framework

By 2030, the world will invest an estimated $57 trillion in infrastructure improvements. Many of these improvements will be made by way of what is known as a public-private partnership (PPP), in which governments will partner with private sector interests. This allows a government to leverage the expertise and capabilities of the private sector to achieve public policy goals. However, these partnerships do not always go entirely smoothly, often hindering progress and leading to expensive disputes.

By 2030, the world will invest an estimated $57 trillion in infrastructure improvements. Many of these improvements will be made by way of what is known as a public-private partnership (PPP), in which governments will partner with private sector interests. This allows a government to leverage the expertise and capabilities of the private sector to achieve public policy goals. However, these partnerships do not always go entirely smoothly, often hindering progress and leading to expensive disputes.

Recognizing these issues, the World Bank released a draft framework of policies, best practices, disclosures, and documentation for creating, managing, and successfully completing PPP projects. The draft framework emphasizes effective ways of maintaining transparency as a means of gaining public trust. The framework was created at the request of the G20 and in cooperation with the Organization for Economic Cooperation and Development (OECD). 

The framework is meant to serve as a model for an ideal PPP arrangement, but its creators intend for it to be heavily adapted to the particularities of a unique situation. The report draws from case studies of 13 PPP projects and pulls together the best practices, things to avoid, and other guiding insights. 

Laurence Carter, a senior director for public-private partnerships at the World Bank said of the draft framework: “Ultimately this is a balancing act between what is practical and feasible for governments to do … Some countries are just not sure how to do it.”

Based on the research conducted by the World Bank in preparing the draft framework, most countries around the world are moving towards improving their disclosure practices. “This framework is now meant to accelerate that,” Carter said.  In many cases, according to Devex Impact, the World Bank found that governments were not opposed to disclosure, per se, but simply overlooked it or believed it should be made at opportune times so as not to interfere with project funding. Unfortunately, that runs contrary to the wishes of most nations’ general populations, undermining trust and creating political turmoil as relates to the PPP project. For that reason, the World Bank proposes in its report that disclosures should be immediate, clear, and ongoing.

While the framework will, no doubt, heavily influence World Bank lending criteria and public policy around the world, the World Bank emphasizes that it is meant entirely as an aid and educational tool. “We are putting out a framework that is entirely voluntary as well as a set of materials and tools that governments can use, with no intention of making it a certification process,” Carter said.