On the relevance of ideology and electoral cycles in the celebration of public-private partnership contracts for infrastructures in Brazil

Maria Luísa Bertulucci ,Alfredo Marvão Pereira

doi:10.24294/jipd.v8i9.6299

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On the relevance of ideology and electoral cycles in the celebration of public-private partnership contracts for infrastructures in Brazil

Maria Luísa Bertulucci

Alfredo Marvão Pereira

Journal of Infrastructure Policy and Development 2024, 8(9), 6299; https://doi.org/10.24294/jipd.v8i9.6299

Submitted：09 May 2024

Accepted：09 May 2024

Published：14 Sept 2024

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Abstract

This paper provides a unique empirical analysis of the effects of political factors on the adoption of PPP contracts in Brazil. As such, it innovates along two different lines: first, political factors behind the adoption of PPPs have been largely ignored in the vast body of empirical literature, and second, there is scant work done on the motives of any kind behind the adoption of PPPs in Brazil. Various economic and financial reasons have been evoked to justify the use of PPPs in general. These include the goal of promoting socio-economic development in a tight public budgetary framework or of improving the quality of public services through the use of economically efficient and cost-effective mechanisms. Any possible underlying political motives, however, have been overlooked in the PPP research. And yet, there is abundant literature suggesting a link between the adoption of PPPs and the ideology of the governing body or the political cycles associated with elections. This study examines the impact of ideological commitment and opportunistic political behavior on the process of PPP contracting in Brazil, including the stages of public consultation, the publication of tender, and the signature of the contract, using federative-level data for the period between 2005 and 2022. Consistent with the outstanding literature, the two hypotheses are tested: first, conservative parties tend to celebrate more PPP contracts than left-leaning parties, and second, the electoral calendar has a significant effect in the process, allowing for opportunistic behaviors. Empirical results suggest that there is little evidence for the relevance of ideological leanings in the process of adopting PPPs in Brazil. Additionally, regardless of ideology, parties significantly choose to enter PPPs at specific points in the electoral cycle, suggesting decisions are influenced by political considerations and electoral strategy rather than by purely financial or ideological considerations. This may pose severe constraints on the efficiency and cost-effectiveness of the contracts, negatively impacting public governance and leading to protracted costs for taxpayers.

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References

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