Garbacik (2016) verify empirically that governments facing fiscal constraints tend to increase their levels of PPP investments as a percentage of GDP without proper institutional mechanisms to deal with the liabilities they create. Using data from French municipalities, Buso, Marty, and Tran (2017) show that municipalities facing budget constraints tend to use PPPs more.

Engel, Fischer, and Galetovic (2013) argue that by itself, private financing does not reduce the fiscal burden on the government, because, through future availability payments or forgone right to charge user fees, the government ends up funding the provision of the infrastructure service over the lifetime of the project. In contrast, Auriol and Picard (2013) argue that there is a shadow cost of public funds at a given time because of the benefits of the alternative uses or distortionary taxation. Iossa and Martimort (2012, 2015) and de Bettignies and Ross (2009) emphasize the role of private finance in resolving uncertainty and achieving a better valuation and monitoring of the project. Iossa and Martimort (2012) show that private financing can allow more infrastructure investments, by yielding efficiency gains that would allow implementation of some projects that are not feasible under public provision.

In contrast to the theoretical literature on PPPs, empirical work has been sparse. One strand looks at the determinants of PPP investments. Moszoro and others (2014) and Percoco (2014) find that institutional factors, such as rule of law, better regulatory quality, and lower corruption significantly increase PPP investments in developing countries. Using data from US states, Albalate, Bel, and Geddes (2020) show that enacting various PPP–enabling laws increases private investment in transportation infrastructure.

This paper contributes to a growing strand of the literature on the determinants of PPP cancellations. Harris and Pratap (2009) find that macroeconomic shocks, investment value, and the involvement of a foreign sponsor increase project cancellations and that local government PPPs are less likely to be canceled than national ones. Marcelo and House (2016) find that multilateral support in implementing PPPs decreases the likelihood of PPP cancellations. Marcelo and others (2019) find that experience does so. Lee and others (2020) find that various projectspecific, macroeconomic, and institutional factors significantly affect cancellation rates of PPPs in developing countries in Asia. In addition to introducing methodological improvements to better match the hazard profile and providing wider coverage of the developing world, this paper uses the percentage of the contract period elapsed as the time scale rather than the calendar year, in order to make the project lifetimes of disparate projects comparable. It also eliminates management, lease, and partial divestiture projects from the dataset, in order to focus on PPPs.

Researchers have identified various sources of risks for PPPs (Irwin 2007, Guasch 2004, and Grimsey and Lewis 2017 provide good overviews). Early termination of a PPP occurs as the last resort in a chain of events triggered by one or more of these risks for the project. Building on Polackova (1998), Budina, Polackova Brixi, and Irwin (2007) provide a framework to conceptualize 5