Project No: 16601217

Title: Swimming Against the Tide: Public-Private Partnership in Water Sector in China

PI: Prof. Wu, Xun   
CI: Dr. House, Schuyler; Dr. Jensen, Olivia; Dr. Qian, Neng; Prof. Wu, Alfred Muluan; Prof. Zheng, Xiaoting


While the performance of public-private partnership (PPP) projects in water sector varies greatly from one another, the empirical literature has so far offered limited insights about contributing factors for such variations. On the one hand, studies based on econometric analysis tend to focus on comparing the performance of private utilities with that of public utilities, in part as a modelling strategy to make do with the limited number of cases with private sector participation, but have little to say about why some PPP projects have succeed while others have failed. On the other hand, studies focusing on the determinants of success or failure of water PPPs are often based on single cases, making it difficult to draw causal inference that can be generalized to a broad context. China’s phenomenal growth in PPP in water sector in recent years offers unprecedented opportunities to understand why the performance of water PPPs may differ considerably from each other. Against the backdrop of the retreat of private sector participation in the water sector elsewhere globally, the country has seen a massive proliferation of PPPs in water sector in the last decade: 300 PPP projects reached financial closure in water sector in China from 2006 to 2015, accounting for more than 60% the total number of such projects in the world during the same period. The sheer number of such projects not only offers necessary variations among comparable water PPPs for econometric analysis, but also provides potential opportunities for conducting comparative case studies that are analytically rigorous. This research aims to contribute to a better understanding of factors and dynamics that may affect the performance and long-term sustainability of PPPs by systematically addressing a set of questions in the context of the rapid development of water PPPs in China. Why have some water PPP projects performed well while others have failed, despite of being situated under similar institutional environments? What are different pathways for water PPPs to succeed, and what are different pathways to failure? What are key factors or dynamics that can contribute to long-term sustainability of water PPPs? The answers to these questions will have significant impact not only in advancing the theories of PPP in public service delivery, but also in safeguarding the effectiveness, efficiency and equity in the provision of water services in China in an era of PPP.