Public-Private Partnerships (PPPs) can be an effective way of delivering infrastructure. However, achieving value for money can be difficult if government agencies are not equipped to manage them effectively. Experience from OECD countries shows that the availability of finance is not the main obstacle in delivering infrastructure. Governance—effective decision-making—is the most influential aspect on the quality of an investment, including PPP investments. In 2012, the OECD together with its member countries developed principles to ensure that PPPs deliver value for money transparently and prudently, supported by the right institutional capacities and processes to harness the upside of PPPs without jeopardizing fiscal sustainability. Survey results from OECD countries show that some dimensions of the recommended practices are well applied and past and ongoing reforms show progress. However, other principles have not been well implemented, reflecting the continuing need for improving public governance of PPPs across countries.

The wealth of nations depends on the quality of their infrastructure. Often, however, infrastructure suffers from ineffective investments and poor maintenance. Proposed solutions, such as New Public Management or Public-Private Partnerships (PPPs) tend to develop into Politicians-Private Partnerships as politicians collude with private firms to exploit present and future tax-payers. Therefore, it is necessary to give citizens better control over collective decision making. While there is a significant economic literature on empowering citizens via decentralization and direct democratic institutions, the role of electoral rules has thus far been rather neglected. An interesting case in point is Switzerland, which is well known for its high-quality infrastructure, extensive decentralization, and direct democracy. However, this paper argues that there is an additional and previously neglected institution that moves Swiss politicians away from client politics towards better serving public interest: Switzerland’s unique electoral institutions which effectively combine proportional elections with multi-seat majority elections. We explain how these institutions work, how they enhance the relationships between citizens and public and private entities, and we argue that they could be implemented in other countries.

The study looks into how governance qualities of decentralized governments mediate the impacts of decentralization on development. Based on a set-oriented approach, the study analyzed data from a nation-wide survey conducted with business managers from all provinces in Indonesia, and found evidence that, despite the country’s uniform decentralization reform, individual provinces exhibited great variation in the qualities of their various physical and institutional infrastructures. Notably, these qualities assumed nested relations, with order and security as well as accountability and rule of law seemingly being the preconditions of basic infrastructure provision as well as local governments’ coordination. Moreover, business investment decisions (measured as staff expansion and product innovation) were found to vary with some specific combinations of these infrastructural conditions. The result provides evidence supporting the argument that both physical and institutional infrastructures are instrumental to realize the supposed benefits of decentralization and supports the recent call of the literature to look into the political-institutional complex in the process of decentralization reform.