Public and private sector discount rates in public–private partnerships

Bibliographic Data

ID9714816
AuthorsPaul A Grout (University of Bristol, corresponding author)
Year2003
Volume113
Issue486
PagesC62-C68
Publication date2003-03-01
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/1468-0297.00109
OpenAlexW2122083708
LanguageEN
Citations received5
References cited9

Whether public sector projects should be discounted at a lower rate than private sector projects is highly contentious. This paper assesses the appropriate private and public sector discount rates in the context of public private partnerships. It shows that there are powerful arguments for using a higher rate to discount private projects than public sector projects and that failure to recognise this may lead to excessive reliance on public provision. However, the reason for the divergence is not related to the conventional incomplete market arguments in the literature. The results may have far broader implications for private sector involvement in public services

Business · Context (archaeology · Divergence (linguistics · Economic growth · Economics · Economy · Market failure · Microeconomics · Private equity · Private equity fund · Private investment in public equity · Private sector · Public economics · Public sector · Finance · Fiscal Policy and Economic Growth · Public Procurement and Policy · Public-Private Partnership Projects

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