ABSTRACT
This study analyzes the Main Determinants in the Distress / Failure Probability of the Public-Private Partnership Financing Scheme in Infrastructure Development. Based on the processed data, namely the Private Participation in Infrastructure Project Database (PPI) World Bank Project Database from 1990 to 2017 that there were 364 projects out of 7050 projects that were canceled or depressed from 128 countries. In terms of data processing, this empirical study uses probit regression with instrumental variable on types of projects that are canceled / distressed. Furthermore, this study also determines instrumental variables where project results are influenced by independent variables which also have variations between independent variables. Another advantage of identifying instrument variables is to minimize the effect of bias on independent variables on the dependent variable, namely PPP failure. The purpose of this research is to determine the main determinant in the performance of the PPP Project. From the results of the study it was found that independence in Government and Government quality significantly affected the failure of PPP projects and the level of government corruption had a significant effect in increasing the potential failure of PPP projects. In addition, macroeconomic stability also has an effect by showing that GDP growth has a significant effect in reducing the potential failure of PPP projects. The involvement of debt providers has an effect on reducing PPP project failures but is not significant due to other factors that have an effect before a debt provider chooses the project or not, such as project bankability.
