Public-Private Partnerships (PPPs) have emerged as a strategic instrument for accelerating infrastructure development and promoting sustainable economic growth in developing countries. This study examines the effectiveness of PPPs as a fast-track development approach, with Bangladesh serving as the primary case. Using a qualitative research design, the study reviews more than 100 scholarly publications, analyzes government reports and 17 project completion reports, and validates findings through expert interviews and content analysis. The research identifies the critical success factors, major implementation challenges, and sector-specific issues affecting PPP performance. The findings indicate that well-designed PPP models can significantly enhance foreign direct investment (FDI), improve governance, transparency, and accountability, reduce corruption, and contribute to the achievement of Sustainable Development Goals (SDGs). However, the study also identifies thirteen major implementation issues and sixteen key challenges, including inadequate project selection, weak institutional capacity, financing constraints, regulatory inefficiencies, and limited technical expertise. To address these limitations, the paper proposes policy reforms, institutional strengthening, innovation-driven hybrid PPP models, improved risk allocation, enhanced knowledge management, and greater stakeholder collaboration. It further introduces the concept of transforming the existing “vicious cycle” of PPP inefficiencies into a “virtuous cycle” through capacity building, governance reforms, and strategic investment. The study concludes that PPPs can serve as an effective catalyst for national development and economic growth when supported by appropriate regulatory frameworks, sound governance, and context-specific implementation models, providing valuable insights for policymakers and other developing economies pursuing sustainable development through public-private collaboration.