Determinants of Private Participation in Public Infrastructure Financing in Muslim Developing Countries

The role of public infrastructure in reducing poverty, distributing wealth and improving economic growth is central in an economy. Surprisingly, among abundant studies discussing poverty and economic growth in Muslim countries, the link to infrastructure development has not been well explored. Some studies suggest that provision of public infrastructure in most of Muslim developing countries is still lacking and under-supplied. However, for most government in these countries, accelerating the infrastructure development is often constrained by inadequate public funding and limited fiscal capacities. In this regard, private sector financing such as the Public-Private Partnership (PPP) scheme can be expected to fill in the gap in financing the public infrastructure as well as to improve the quality of the services. Indeed, from Islamic finance perspectives, there are several structures of shariah compliant transactions that can be utilized to accommodate the needs of financing public infr