Report: Successes and failures of public-private partnerships

|  January 12, 2011 |

A new study from the Competitive Enterprise Institute looks at several public-private partnership (PPP) case studies in both the surface transportation and real estate sectors. He finds that the growth of PPPs has increased efficiency in the transportation sector – which has historically been dominated by government monopolies – but that the spread of PPPs in real estate development has had a largely negative effect.

“In the case of surface transportation infrastructure, innovative new private-sector financing, management, and ownership regimes have much to offer in terms of minimizing taxpayer exposure to risk, capturing user revenues, and creating an efficient transport network,” says Marc Scribner, land-use and transportation policy analyst who authored the report. “In contrast, government’s recently expanded role in real estate development has increased taxpayer exposure to risk, socialized costs, and concentrated the benefits into the hands of select private developers and special interests.”

As evidence, Scribner cites transportation PPPs in California, Illinois, Indiana, Texas, and Virginia; and real estate PPPs in Minnesota, New Jersey, New York, Pennsylvania, and Washington, D.C.

“A responsible path forward would be to utilize PPPs in surface transportation infrastructure development and management, while cutting bureaucratic impediments such as land-use regulations and business licensing to promote redevelopment,” Scribner says. “In essence, both require reducing political intervention and expanding market opportunities. Only when policy makers realize their own limitations will these sectors be free to maximize wealth creation that could potentially bring about a new era of American prosperity.”

For the full report, go to http://cei.org/issue-analysis/limitations-public-private-partnerships.

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