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Why do U.S. states adopt public–private partnership enabling legislation?

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  • Geddes, R. Richard
  • Wagner, Benjamin L.

Abstract

Public–private partnerships, or PPPs, have the potential to address a range of urban economic issues. As of late 2012, thirty-two U.S. states and Puerto Rico had enacted legislation enabling the use of PPPs. PPP enabling laws address such issues as the treatment of unsolicited PPP proposals, prior legislative approval of PPP contracts, and the mixing of public and private funds. We utilize 13 key elements of PPP enabling laws to develop an index reflecting the degree to which a state’s law is encouraging or discouraging of private infrastructure investment. We examine why states pass such laws, and why some states pass legislation that is relatively more favorable to private investment. We consider demand side, supply side, and political/institutional drivers of passage. Vehicle registration growth and greater traffic congestion both increase the likelihood of passage, as does political agreement between a state’s executive and legislative branches. Traffic congestion, growth in per-capita income, and the percent of Republicans in the state’s House of Representatives all increase a law’s favorability to private investment. There is little indication that traditional public finance variables, such as federal highway aid, affect the likelihood of passage or the favorability of a state’s PPP enabling law.

Suggested Citation

  • Geddes, R. Richard & Wagner, Benjamin L., 2013. "Why do U.S. states adopt public–private partnership enabling legislation?," Journal of Urban Economics, Elsevier, vol. 78(C), pages 30-41.
    • Handle: RePEc:eee:juecon:v:78:y:2013:i:c:p:30-41
    DOI: 10.1016/j.jue.2013.05.003
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    Cited by:

    1. Geddes, R. Richard & Reeves, Eoin, 2017. "The favourability of U.S. PPP enabling legislation and private investment in transportation infrastructure," Utilities Policy, Elsevier, vol. 48(C), pages 157-165.
    2. Daniel Albalate & Germà Bel & Richard R. Geddes, 2015. "“Strong versus Weak Vertical Integration: Contractual Choice and PPPs in the United States”," IREA Working Papers 201518, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
    3. Ronit Mukherji, 2023. "Risk Sharing in Public-Private Partnerships," SN Operations Research Forum, Springer, vol. 4(4), pages 1-17, December.
    4. Anderson, John E. & Giertz, Seth H. & Shimul, Shafiun N., 2022. "Reducing property taxes for agriculture: Diffusion of use-value assessment policy across the United States," Land Use Policy, Elsevier, vol. 120(C).
    5. Daniel Albalate & Germà Bel & R. Richard Geddes, 2017. "How Much Vertical Integration? Contractual Choice and Public–Private Partnerships in the United States," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(1), pages 25-42, August.
    6. Alberto Amore & C Michael Hall & John Jenkins, 2017. "They never said ‘Come here and let's talk about it’: Exclusion and non-decision-making in the rebuild of Christchurch, New Zealand," Local Economy, London South Bank University, vol. 32(7), pages 617-639, November.
    7. Wei Li & Jie Li & Siwei Sun, 2023. "Influence of public credit risk on private capital in public–private partnership models," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1330-1343, March.
    8. Achard, Paola Olimpia & Di Berardino, Antonina, 2018. "Public Private Partnerships: Strategic Assets and Managerial Models," 29th European Regional ITS Conference, Trento 2018 184925, International Telecommunications Society (ITS).
    9. Shu, Hang & Durango-Cohen, Pablo L., 2021. "On the design of optimal auctions for road concessions: Firm selection, government payments, toll and capacity schedules with imperfect information," Transportation Research Part B: Methodological, Elsevier, vol. 146(C), pages 210-236.
    10. Anthony E. Boardman & Matti Siemiatycki & Aidan R. Vining, 2016. "The Theory and Evidence Concerning Public-Private Partnerships in Canada and Elsewhere," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 9(12), March.
    11. Daniel Albalate & Germà Bel & R. Richard Geddes, 2018. "“Do public-private partnership enabling laws increase private investment in infrastructure?”," IREA Working Papers 201815, University of Barcelona, Research Institute of Applied Economics, revised Jul 2018.
    12. Yubo Guo & Igor Martek & Chuan Chen, 2019. "Policy Evolution in the Chinese PPP Market: The Shifting Strategies of Governmental Support Measures," Sustainability, MDPI, vol. 11(18), pages 1-24, September.

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    More about this item

    Keywords

    Transportation infrastructure; Public–private partnerships; Private investment; State public–private partnership enabling laws; Fiscal constraints;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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