A Statistical Analysis of the Impact of PPPs on Economic Growth Case of Albania

Governments utilize public-private partnerships (PPPs) to effectively offer public goods and services, especially in conditions of restricted financial resources. They consist of mutual agreements where there is conditionally needed participation of both the private and public sectors. The private sector‘s contribution includes financial support, risk allocation, asset management, innovation, and advanced employee skills, while the public sector’s contribution includes financial support, land provision, legal framework, technical expertise, etc. The early origin of PPPs dates back to ancient times when private entities were involved in constructing infrastructure projects, such as roads, bridges, and public facilities. The concept continued to evolve and expand during the Industrial Revolution in the late 1700s and early 1800s, a period that required significant investments in infrastructure and transportation. Their importance is widely known for their impact on improving infrastructure and other public goods and services, as well as boosting investments, creating job opportunities, and saving costs, therefore contributing to the economic growth and sustainable development of a country. With the globalization process, PPPs have been increasingly used in sectors such as transportation, energy, healthcare, digital infrastructure, and education, both in developed and developing countries. Albania has used PPPs in different projects as a developing country, especially in infrastructure. The first step of this process was the Concessions Law in 2006, continuing with its revision in 2013 (Law no. 125/2013 “For Concessions and Public – Private Partnerships”). Since then, the Albanian government has utilized PPPs to address infrastructure, energy, water supply, and treatment needs, which also have benefits for the country's economic development. This study aims to evaluate the impact of Public-Private Partnerships on Albania’s economic growth, proxied by GDP. Based on secondary data for 2016-2023, both correlational and regression analyses are used for hypothesis testing. The study shows that PPPs positively impact the GDP of the country. This conclusion provides an essential insight for the broader literature, demonstrating that even with a limited budget and an emerging economy, a developing country can benefit from the development and implementation of PPP projects.