How Can Cities Thrive? The Public-Private Partnership Solution
Public-private partnerships (PPPs) – agreements between governments and private firms to support broader access to public infrastructure and services – can play a key role in addressing the growing global challenge of rapid urbanization.
In a recent interview in IFC’s quarterly online journal, Handshake, leading urban economist and Triumph of the City author Edward Glaeser underscores that a well-functioning PPP is one of the best ways to fund new urban infrastructure through user fees. These fees “get the right infrastructure to people who need it and value it most,” says Glaeser.
Upgrading slums in Brazil. Credit: Cities Alliance
Glaeser also discusses the differences in lessons learned about infrastructure PPPs in the developed and developing world, and offers up advice to governments and the private sector on creating more effective urban infrastructure partnerships.
Original articles and interviews featured in this latest issue of Handshake are focused solely on the needs of cities. Together, they demonstrate that the right physical capital – thoughtfully tailored infrastructure – increases the efficiency of cities, allowing for more and better innovation. Key to this are well-planned and well-functioning PPPs, which help cities improve their infrastructure in ways that would be impossible without private participation, making urban areas more efficient and raising living standards.
Population surge drives need for PPPs
The coming massive upsurge in world population adds urgency to the need to find infrastructure solutions for urban areas. By 2030, many cities around the world will have doubled in population, and impact will be felt most acutely in many African and Asian cities, which have rudimentary infrastructure.
Upgrading slums in Sao Paolo, Brazil. Credit:Cities Alliance
But cities are limited in resources, particularly during economically challenging times, and they must engage the private sector to meet infrastructure and service provision needs. PPPs offer one solution to this dilemma by introducing private sector innovation, efficiency, and financing.
Bucharest water PPP. Credit: Apa Nova Caption
“PPPs will allow these constrained cities to meet the needs of their burgeoning populations, supplying the resources that make a city livable and attractive, in the midst of this unprecedented demographic shift,” according to Handshake contributors Abha Joshi-Ghani and Vipul Bhagat.
This cities-themed issue of Handshake also spotlights PPPs in Barcelona, Cartagena, Chennai, Manila, and Saint Petersburg, among others, and includes a special section on cities and climate change. Interviews with former U.K. Secretary of State for International Development Clare Short, and Barcelona Global CEO Mateu Hernandez cover the catalytic role PPPs can play in addressing cities’ current and future challenges, and an article from Cities Alliance manager Billy Cobbett offers 10 tips for government officials considering change.
Manila's water and sewerage PPP. Credit: Danilo Pinzon/World Bank
Ultimately, success will be measured by how well cities address these growing challenges. The PPP structure provides one solution by contributing the skills and assets of both the public and private sector, while sharing the risks and rewards of delivering the service.
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