Perspectives

The Political Economy of P3 PPPs

It is time for the US to take the leap and take on more P3 projects for traditionally public US surface transportation projects

Dr. Jeff D. Makholm’s white paper looks at US interest in “P3” public-private partnerships, a type of enterprise that has long been disfavored in the United States. Dr. Makholm draws correlations between the Latin American experience in the 1990s, particularly the advances in bidding and payment mechanisms developed by Chilean economists, and the current experience in the United States, which is grappling with strong, popular interest in re-investing in national infrastructure in an era of sharp budgetary constraints. He concludes that it is time for the US to take the leap and take on more P3 projects that use more private funding for traditionally public US surface transportation projects, following the example of the successful implementation of P3 projects in Chile.

Figure 1: Chile is one of many countries building P3 toll roads

 

Source: World Bank Private Participation in Infrastructure Database

The Political Economy of P3 PPPs


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