Abstract: We assembled a large panel of project-level technical and financial data as well as country-level economic, institutional, political, and governance variables to assess the determinants of private financing of infrastructure in emerging markets and developing economies. Controlling for economic characteristics, we find that overall private participation of infrastructure financing increases with freedom from corruption, rule of law, quality of regulations, and decreases with court disputes. We provide plausible explanations of deviations from this pattern when data are disaggregated at the sectoral level. We also found that legal systems---types of democracy or dictatorship---do not play a role in whether the private sector invests in infrastructure, but it increases with third-party government oversight, namely opposition party activity. Our results do not vary when controlling for income inequality and across quartiles of experience, country wealth, and per capita income. The study shows that upstream "enabling" institutions, policies, and regulations and sector economics need to be addressed simultaneously to facilitate private infrastructure investment financing.

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