Incentive regulation and the productive efficiency of public-private partnership toll-roads

During the last decades, various studies have documented the impact of incentive regulation on the productive efficiency of network industries, being toll roads a notable exception. Using two-stage data envelopment analysis (DEA), we contrast the performance of two groups of Peruvian Public-Partnership Project (PPP) toll roads governed by distinct regulatory regimes, with different incentive powers and risks transferred to concessionaires. We find that during from 2016 to 2022, “pure toll” PPP projects achieved higher average efficiency scores than ‘hybrid toll-availability payment’ projects. As well, the calculation of Malmquist indices reveals the differentiated impacts of climatological and public health-related shocks on road productivity during the study period. Results also show that PPP projects with relatively strong incentives exhibited a greater average productivity growth than those characterized by low-powered incentive schemes. Additionally, the average profitability indicators of the first group of projects were higher than those of the second group.