Fiscal Policy and Public Investment (Paperback)

Governments are typically responsible for constructing and maintaining physical infrastructure (such as roads, railways, ports, and telecommunications). The dilemma they face is how to mobilize the financing for infrastructure investment within a macroeconomically sound and fiscally sustainable framework. Increasing taxes or public borrowing may not be feasible or desirable. Nor is diverting resources from critical social sectors, such as health care and education. Some countries have turned to the private sector for financing, forming public-private partnerships (PPPs), with varying degrees of success. This publication explores these issues, which are particularly acute for developing countries, as well as the fiscal implications of PPPs, giving examples from eight countries in Africa, Asia, and Latin America.