Sharing out the costs of a public–private partnership

Abstract

This article looks at factors which have affected the shares of public and private money that have been going into public–private transportation partnership investments in the US. It looks at a number of recent partnerships and relates the importance of the private sector to sets of institutional and technical variables.

Keywords:

• public–private partnerships
• transportation
• infrastructure investment
• public finance

JEL Classification:

• H54
• H72
• L90

Funding

The authors would like to express their gratitude for the financial support from the Commonwealth of Virginia to Public Works Financing for granting access to its P3 project data set.

Notes

¹ While there are considerable variations, a typical PPP involves government signing an agreement for a private company or consortium to supply it with services with the former designing, building, owning and running the physical assets.

² While a sigmoid-type specification (such as a logit) could have been used for the dependent variable, the model is not designed for forecasting and this was deemed unnecessary.

³ This is largely for efficiency reasons, private investors are less likely to terminate ‘bad’ projects.