Government Guarantees for Private Infrastructure Projects Lead to Costly Fiscal Problems.
Governments often provide financial support to private infrastructure projects, like grants or guarantees, to attract investment. However, this can lead to unexpected costs later on. For example, in Spain and Indonesia, governments had to pay billions due to guarantees given to private projects. Even when cash subsidies are given, they may not reach the intended recipients, as seen in Honduras. Sometimes, not providing support can also cause problems.