National Culture Shapes Private Investment in Transportation Infrastructure Projects around the Globe

Abstract

Recent decades have seen extensive use of public-private partnerships (PPP) in international infrastructure development from governments, private construction firms, and humanitarian organizations. Given the high social importance of civil infrastructure, considerable research attention has sought factors that lead to successful PPP. In a contribution to this body of work, and to the theory of the social sustainability of infrastructure, this paper presents statistical evidence showing that the choice of how to engage private investment in infrastructure is not culturally neutral. This analysis is built on a World Bank database of 1,792 railroad, seaport, airport, and toll road projects with private investment from 27 low- and middle-income nations and Hofstede’s cultural dimensions. Multinomial logistic regression shows that there are statistically significant relationships between Hofstede’s cultural dimensions and the various methods used to enable private investment in infrastructure projects. For all transport project types aggregated together, high power distance index scores predict the use of private funds in projects involving the construction of new infrastructure, while high individualism-collectivism and uncertainty avoidance scores predict the use of private funds in brownfield projects. Toll roads, which change a cultural norm regarding how most roads are accessed and paid for, emerged as a divergent technology type. Railroads are the technology type most strongly influenced by cultural dimensions. Engineers and policymakers may use these results to understand what forms of private investment in transportation infrastructure are more likely to be culturally acceptable in a wide variety of local contexts.