In Korea, SOC infrastructure such as roads, railways, harbors, airports, sewage systems, and electricity grids have not been able to keep up with the country’s economic growth. In the 1980s, public corporations turn into one of the factors in government failure that cleary showed the inefficiency of the public sector even though they were established as alternatives to market failure. Since then, there has been a global shift towards utilizing the private sector for the development of public projects. Neo-liberalists in particular argued that government failure was attributed to the excessive intervention of the public sector into the private sector. Their idea emphasized that private participation was instead needed in the public sector. As Korea’s GDP grew and government spending on welfare to improve the quality of life increased in the early 1990s, the government found it difficult to fund SOC projects on its own. To overcome this challenge, the government reviewed individual laws and regulations allowing privateinvestment in SOC infrastructure and finally passed the Promotion of Private Capital in Social Overhead Capital Investment Act in August 1994, allowing the private sector to participate in various SOC fields.
The PPP was introduced in the late 1990s to accel- erate the provision of public infrastructure, to trans- fer risk on infrastructure buildings, and to provide sufficient room for innovation by the private sector. It is more sensible to implement a PPP for these rea- sons rather than to overcome insufficient fiscal ca- pacity to build public infrastructure. However, Korea did not automatically succeed in implementing an ef- fective PPP. Through trial and error and continuous improvement, their experience can be classified into four phases of PPP development: Phase 1) sporadic promotion of PPP-based projects; Phase 2) induce private capital to build infrastructure facilities; Phase 3) positive government support and decision role for revitalizing privateinvestment; and Phase 4) revitali- zation of infrastructure fund and abolition of mini- mum revenue guarantees as well as the introduction of government compensation of base (raw) cost (Kim 7). Three success factors allowed these phases to de- velop: supportive programs consist of financial sup- port, risk sharing, credit guarantee schemes, and tax incentives; a professional service provider and the PI- MAC; and foreign investor participation. Dedicated PPP Units, such as the PIMAC, were established to complete several functions of government required to reinforce the PPP program. The functions com- prise policy formulation and coordination, quality control, technical assistance, standardization and dis- semination, and promotion and marketing (Sanghi, Sundakov, and Hankinson 2).
The economic importance of infrastructure has been the subject of extensive research since the late 1980s and is free of controversy. The World Economic Forum (2008) lists infrastruc- ture as one of the most crucial elements to a country’s productivity and competitiveness. Aschauer (1989) provides evidence of significant links between investment in infrastructure and a country’s economic development and wealth. Yeaple and Golub (2004) suggest that infrastructure is one of the key determinants of a region’s comparative advantage. Though infrastructure is recognized as a crucial input for economic productivity, there is no clear and unanimous definition of the term. An early definition is given by Stohler (1964), who charac- terizes infrastructure as the substructure or the “skeleton” assets of an economy that are essen- tial for the production of goods and services. Later approaches have subdivided infrastructure into social and economic subgroups. Economic infrastructure (including transport, ener- gy/utilities and communication facilities) provides key services to business and industry and enhances productivity and innovation. Social infrastructure, on the other hand, is seen as a medium for supplying basic services to households (healthcare, education and judicial facili- ties) (ING, 2006). In recent years, private investments in infrastructure have increased signifi- cantly and investors have begun to perceive infrastructure as an attractive asset class enhanc- ing the efficiency of their investment portfolios. Financial strain on governments, making them unable to provide adequate infrastructureprovision in times of increasing global com- petitiveness has contributed to the emergence of privateinvestment opportunities in recent years (RREEF, 2006). A shortage of good quality commercial real estate, along with declin- ing yields, has intensified this development and amplified the capital flow into seemingly re- lated sectors (Newell and Peng 2008). Although many investors are restraining their invest- ments due to the current financial crisis, infrastructure still seems to be very attractive, a fact which is underpinned by the INREV 14 Investment Intentions Survey 2009: According to this study, more than 60% of all institutional real estate investors considered allocating funds to the infrastructure sector in 2009.
defined source of income), b) collaboration between public and private sector should be set very early when starting a project, so that, in phase design, the project will benefit from the experience of the two sectors, legal and regulatory environment favorable. The public sector should be able to minimize the uncertainties of this nature to avoid increased costs and a disengagement of the private sector. New financing solutions related to pricing principles applied progressively staged at Community level, and thus benefiting from contributions from users, will allow better funding of various models. Although the problem is not the only financial uncertainty, it remains, however, a central aspect. It's that big infrastructure projects are mostly long-term cost, but suffers from weak financial inflows in the period immediately following their completion. Based on this finding, the High Level Group on Public-private partnerships planned use of structurally subordinated loans and grants or loans that can be upgraded, covering the initial operational phase of the design. These loans can be processed later in the medium and long term loans, to their redemption by the banks, once the project has achieved financial stability. In addition, the Group noted the weakness of the supply of securities or subordinated debt financing mezzanine European market. Developing transport infrastructure, which is based on the financing capacity of institutional investors as insurance companies or pension funds, remains very limited. The rules governing financial aid  have been integrated into the negotiations of Agenda 2000 and now provides a tool for risk capital participation of trans-European network projects. This new tool should enable us to attract investors and thus increase the resources available for making infrastructuri.Un another tool that was included in the new EU funding rules should also facilitate the creation of public partnerships -private transport. It's Multi-Annual Indicative Programme. This instrument of TEN budget aims to increase the visibility of European funding for new projects RTE. He will be removed, at least some of the uncertainties related to funding and thus will more easily attract private investors.
growth-promising factor in India, and the impact of PPP investment leads to skill development in the labor force and increase in efficiency leading to economic growth (Biswas, 2016). Reddy (2015) assesses the prominence of PPP investment in India in terms of releasing budgetary constraints and employment creation and finds a positive effect of PPP investment on GDP growth. PPP investment in infrastructure appears to be an important component of total infrastructureinvestment for a country. Estache (2014:9) recommends the importance of econometric evaluation of PPP and a "careful choice of control variables” to fill up the gap in the literature related to PPP infrastructure. Labor is the driving force of the economy determining the economy's production capacity apart from the capital. Solow growth model explains the importance of labor and capital achieving in long-run economic growth. Romer (1987) finds labor as a driving source of economic growth and Bloom (2010) identifies the low productivity of labor in developing countries as a significant constraint to economic growth. Skills of the labor force are termed as the quality of the labor. Importance of labor quality and economic growth are reinforcing each other as disclosed by (Hanushek & Kim., 1995). Quality of the labor is proxied by literacy rate as finds in literature. The positive relationship between literacy rate and economic growth is consistent in the literature (Barro, 1991) (Mankiw, 1992). Capital stock, which refers to the government-owned assets ((Aschauer, 1989) ;(Munnell, 1990)), also positively contributes to economic growth (Flores de Frutos, 1998) (O’Fallon, 2003). Furthermore, the productivity of a country’s production changes according to the composition of the capital stock (Chen, 1997).Electricity has proven to have a significant favorable impact on the production process and the livelihood of rural people while contributing to uses of the machines allows greater productivity and to lighting purposes and (Jerome, 2012).Telephone infrastructure and economic growth have a positive relationship (Sridhar, 2008) and reduce the fixed cost of obtaining information (Norton, 1992). Transportation and water and sanitary infrastructure are also known to improve productivity. Theoretically, a reduction of the transport cost increases accessibility, which is considered as “primary benefit” of transport. Chandra (2000) studied large infrastructure spending on highways and found positive effect of increased investment. Likewise, improved water access and sanitation positively contribute to economic growth, while a lack of clean water and sanitation is a barrier to economic growth ((CSD, 2004); (Frontier Economics, 2012)).
The prediction of the neo-classicalists of a convergence in economic development has become difficult to achieve and may partially be explained by the difference in key institutions among countries of the world (North, 199 ; Tornell, 1993; Knack and Keefer, 1995). ge nor ( 1 ) observed that the dearth of infrastructure continues to be a key obstacle to growth and development in many low-income countries and to alleviate these constraints to growth and poverty reduction, several observers have advocated a large increase in public investment in infrastructure, in line with the ‗‗Big Push‘‘ view of Rosenstein- Rodan (1943). He argued further that infrastructure services have a strong growth-promoting effect through their impact on production costs, the productivity of private inputs, and the rate of return on capital—particularly when, to begin with, stocks of infrastructure assets are relatively low.
During the past two decades a silent revolution has swept the globe and a large number of industrial and developing countries have pursued decentralization reforms that attempt to move public decision making closer to people. The reform agenda has been pursued through varying combinations of political. administrative and fiscal decentralization initiatives that aim to shift some traditional central government functions to intermediate or lower orders of government. These reforms have proven to be controversial. This is because decentralization is perceived as a solution to some problems such as a dysfunctional public sector with lack of voice and exit as well as a source of new problems such as capture by local elite, aggravation of macroeconomic management due to a lack of fiscal discipline, race to the bottom and potentially greater barriers to common economic and social union through beggar- thy-neighbor policies. The impact of decentralization on corruption (defined as the abuse of public office for private gain or exercise of official powers against public interest) is an area of growing interest inviting much controversy and debate. While this debate has largely centered on the overall impact of decentralization, the focus of current paper is to examine various arguments in this debate in the specific case of decentralized provision of infrastructure – a yet largely unexplored area of research.
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the top 3 CSFs selection. Through the interactions we had, in following- up on the survey-based analysis, it was established that this is due to the fact that the concession agreement is seen as the cornerstone for public- private cooperation. As such, it clearly defines the roles, rights and duties as well as the responsibilities of all parties involved in the project. This may then serve as a tool to resolve disputes, as well as a framework for outright conflict solving as it contains the details of the risk allocation. Hence, mutual agreement and trust are easier to obtain according to the respondents, as a clearly written concession agreement does not leave room for different interpretations.
The Federal government and taxpayers are making a large and rapidly growing investment in financial aid to for-profit schools, with few tools in place to gauge how well that money is being spent. Available data show that very few students enroll in for- profit schools without taking on debt, while a staggering number of students are leaving the schools, presumably many without completing a degree or certificate. To boost enrollment, some for-profit schools recruit large numbers of new students each year. In some cases, schools enroll more students over the course of the year than were enrolled at the beginning of the year. To ensure these enrollment increases, it is necessary for the schools to devote very large shares of Title IV dollars and other Federal financial aid to marketing activities, not education.
Mega Projects mean private or joint sector (in which the equity of government or any public sector enterprise is less than or equal to 49%), industrial units with proposed investment of Rs. 200 Crore or more, which act as anchor units in their respective fields, provide employment on large scale and promote micro and small sector industrial units of their field extensively. A huge capital investment is made by such units which brings indirect benefits to the State. Many times, such units require speedy facilitation by State government for ensuring commencement of production at the earliest by saving time in establishing the units.
It may be surprising that the banker would ever liquidate his project in this environment, since he can always choose his investment and structure his claims portfolio so that it is not necessary to do so. The key obviously lies in the condition that the marketable share of the banker’s project must be less than its liquidation value for liquidation to be optimal. In this case, the banker can raise more outside funds by promising to liquidate. Therefore, though the banker gets no payo¤ in the event, liquidation in the bad state allows him to increase his investment. If the price of liquidity is high enough, the increased investment a¤orded may su¢ ciently increase his payo¤ in the good state to compensate (in expectation) for the sacri…ce of any payo¤ in the bad state. This result will be discussed at greater length in the next section.
It is also seen as a wide range of economic and so- cial facilities that help in creating an enabling en- vironment for economic growth and quality of life. The author [ 11 ] also thought that infrastructure services have a bearing on economic growth. Sim- ilarly, the author [ 15 ] shared the same view by stating that infrastructure refers to all basic inputs and requirements for the proper functioning of the economy. Infrastructure is simply the engine that is needed for the proper functioning of a city. It can be put in place by private or public involve- ment to facilitate the effective functioning of the society and also infrastructure categorized into two namely physical and social infrastructures. Infrastructural facilities provision refers to those basic services without which primary, secondary, and tertiary productive activities cannot function. In its wider sense, it embraces all public services from law and order through education and public health to transportation, communications, and water supply [ 7 ].
In a perfect market the environmental performance of a firm should not be related to its financial performance because each firm is investing in environ- mental technologies until marginal costs equal marginal benefits. Whether there exist investment-inefficiencies due to information asymmetries or high hurdle rates due to short sighted management is a controversial debate (e.g. Allcott and Greenstone, 2012; Nadel and Therese, 2012; Anderson and Newell, 2004; Howarth et al., 2000). However, in their survey on the long run economic impacts of voluntary environmental firm performance Blanco et al. (2009) conclude that being green relates neutrally or positively to financial perfor- mance. This suggests that over-investment in green technologies is absent and that improving eco-efficiency is not merely a cost factor but creates rev- enue increasing and cost decreasing opportunities. Ambec and Lanoie (2008) identify the following three revenue increasing opportunities: Better access to certain markets, differentiating products, and selling pollution control tech- nologies. On the other hand, they identify four costs reducing opportunities: Risk management and relations with external stakeholders, cost of materials, energy and services, cost of capital and cost of labor. Russo and Fouts (1997) relate corporate environmental performance to the resource based view of the firm which stresses the importance of intangible resources 3 of firms as key to a
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DOI: 10.4236/jep.2018.99061 984 Journal of Environmental Protection two others were close. More than half were less than the 45.6% which does not bode well for long-term protection of the community. If the asset ratio is low, the next question is to see if utilities are under investing each year. Figure 12 shows that 13% of the utilities had no capital investments during 2016, and 37% had invested less than the 1.75%. Over 20% of the utilities had major capital projects going on and large percentages devoted to capital. When comparing these two factors, there was limited correlation (see Figure 13), so the conclu- sion was that investments were made in large blocks as opposed to more pay-as-you-go methods. This is partially confirmed by comparing the debt and the net plant asset/replacement value ratio (see Figure 14). The graph shows that higher debt related to higher replacement values, meaning the investments were more recent. It also suggests that there is much investment coming is some communities. To be fair a longer-term reporting period should be used in future
In this paper, we use village-level panel data to test the preference-matching and divergence hypotheses in the context of Indonesian decentralization. We test the hypotheses by asking two questions: first, has the decentralized provision of public infrastructures reflected local preferences? Since the provided public infrastructures are chosen at the local level under decentralization, the preference- matching hypothesis indicates that such provision should reflect the needs and preferences of the local citizens. Second, has decentralization led to divergence in the amount of local infrastructures available in rich versus poor localities? Under decentralization, investment in local public infrastructures depends largely on local resources. The divergence hypothesis predicts that differences in local resource endowments across localities may lead to differences in public infrastructureinvestment.
previously. Magnitude of the effect of productive public investment on private capital accumulation increases in this new specification, just when a negative influence of public investment located in bordering regions is found. In fact, these two results can be interrelated. When a region has an adequate infrastructure endowment, it means that can attract resources for investment from other regions where public capital stock is lower or worse. At this point, our results move away from the theoretical predictions outlined above, because a positive impact coming from spillover effects was to be expected; it may be caused by a shortcoming of the theoretical model: it does not take into account private capital mobility across regions, which could be one of the main underlying explanations behind a negative influence of spillover effects.
One result is well known in the economics literature. If capacity is added and priced according to the theoretically ideal prescriptions of investment analysis and congestion pricing, then it will just pay for itself provided there are no scale economies or diseconomies in its construction. 17 If road construction instead involves diseconomies of scale, as may happen in urban settings because of intersections and rising land costs (Small 1999), then the road would even more than pay for itself. However, in the common case where there are scale economies in construction, for example due to fixed costs resulting in more capacity than is strictly needed to handle the traffic, optimal congestion pricing will not cover the investment cost. Thus subsidies are needed, especially for the lower-volume, less financially attractive roads that may be desired to encourage regional integration and economic development.
Disappointed with the earlier efforts to promote private savings on a purely voluntary basis, both Labour and the Conservatives became convinced that some level of compulsion was necessary (House of Commons 2008; Bridgen and Meyer 2011). This resulted in a cross-party agreement in 2008 to introduce a new strategy to expand private savings that was based on the idea of “auto-enrolment”. This requires employers to subscribe their workers to a private scheme and to contribute to it, unless the employee decides to opt out. The insight behind auto-enrolment is that people tend to stick to default options (Thaler and Sunstein 2008); hence most people are expected to refrain from leaving a scheme in which they have been automatically enrolled, whereas it is less likely that they join that scheme voluntarily. For those employers who do not actively select a scheme for their workers, the government designed NEST; a semi-private default scheme, executed by private associations but heavily regulated by the state to control investment risks and achieve low costs. While the pension industry welcomed NEST as a solution for commercially less attractive low-income households, they lobbied intensively to prevent competition with their existing pension provision (achieved through a cap on contributions to NEST). The industry also managed to get a relatively free hand in organising the private pension schemes that operate alongside NEST. Whereas NEST is subject to strict price regulations, no new requirements were introduced for the other schemes (although the government included “reserve powers” in the 2008 Pensions Act to impose additional quality requirements to private schemes should it not achieve its objectives). Hence the new situation was characterised by a heavily regulated semi-public scheme for low-income households, combined with relatively unregulated private pension provision for higher incomes.