Economic development promoted through public-private partnerships in the European Union and Colombia from a budgetary perspective

Abstract

Without acknowledging that Public-Private Partnerships (PPPs) are a contracting model that allows economic development, it is necessary to investigate the budgetary measures adopted in the case of the European Union and Colombia to prevent its use as a tool to transgress the budgetary limits of public indebtedness. To this end, in this article a qualitative and analytical methodology will be used to: i) identify the importance of establishing and complying with budget limits for economic development, ii) expose the dilemma that exists between the satisfaction of public needs and the fulfillment with budget restrictions, iii) analyze PPPs as an alternative to solve the aforesaid problem and iv) point out the budgetary measures adopted by the European Union and Colombia that impact the PPP contracting model. According to the information gathered it will be shown that in Colombia, despite the existence of some budgetary limitations for PPPs developed by territorial entities, the same restrictions are not foreseen for national entities and it will be confirmed that in the European Union there is the possibility of including in debt service the PPPs when the transfer of risk and rewards of infrastructure relies on the public partner, while in Colombia this possibility has not been considered.