The Importance of Public–Private Partnerships in Building Underdeveloped Economies

Abstract

Public–Private Partnerships (PPPs) have been widely promoted as instruments for mobilizing finance, improving service delivery, and accelerating infrastructure development in underdeveloped economies. This article presents a critical, evidence-informed assessment of the role PPPs play in economic development, identifies conditions under which they add value (or create risks), and offers policy recommendations tailored to low-income and fragile states. The analysis synthesizes institutional reports (World Bank, IMF, UN), empirical studies, and sectoral case examples to show that PPPs can be an important complement to public investment—provided governance, risk-management, transparency, and capacity constraints are explicitly addressed. Where such preconditions are absent, PPPs risk producing fiscal contingent liabilities, unequal access, and capture of public assets by private interests. The article concludes with a practical framework for policymakers seeking to employ PPPs to advance inclusive, sustainable growth.