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Giving Compass' Take:
• Justin Marlowe argues that in spite of recent failures public-private partnerships (PPPs) are not on the decline. He predicts that the future of PPSs lays with human services, rather than infrastructure.
• How can philanthropy support effective PPPs? What research is needed to guide these efforts?
• Learn about long-term public-private partnerships.
These are dark days for public-private partnerships. President Trump’s P3-focused infrastructure finance plan was dismissed by Congress as a dead-on-arrival proposal. Earlier this year, more than 80 organizations and trade unions signed a letter imploring the World Bank to stop supporting infrastructure P3s. One of the biggest in recent history, the Indiana Toll Road, fell into bankruptcy last year after a long and difficult ride.
Does this mean P3s are a passing fad? Far from it. Most trends suggest the U.S. transportation P3 sector is just getting off the ground. As long as the private sector has ideas to help deliver infrastructure faster, safer and cheaper, state and local politicians will be happy to listen.
But all this focus on P3s for infrastructure misses a fundamental truth: The real money is not in roads and bridges. It’s in people and services. Today the “Big 3” -- education, Medicaid and corrections -- account for more than two-thirds of total state spending, according to the National Association of State Budget Officers. By contrast, state spending on capital projects is barely 10 percent. The story is similar in cities and counties, where public safety and social services are crowding out all other spending.
This begs a natural question: Can P3s improve outcomes and drive cost savings in core state and local services? Fortunately, there are a few early examples where the answer is yes.
Read the full article about public-private partnerships by Justin Marlowe at Governing.