Are Public-Private Partnerships a Good Choice for U.S. Highways? A Review of the Literature

In light of chronic funding shortfalls and waxing highway construction and maintenance demands, public private partnerships (PPPs) (often though not always in conjunction with road pricing) have been garnering increasing attention from government officials in the U.S. and abroad. Despite many strongly-held opinions on PPPs – both pro and con – systematic evaluations of their efficiency, effectiveness, equity, and feasibility are all too rare.This paper is the first part of a research project that aims to rectify this shortage of careful, evenhanded, and rigorous analyses of PPPs by drawing on the research literature to develop a comprehensive PPP evaluation framework. Drawing on a careful and extensive review of the research literature, we (1) present the often misunderstood economic properties of highway and road infrastructure, (2) outline the rationales governments cite for engaging in PPPs, (3) review the various types of applicable PPP arrangements, and (4) describe the conditions and factors that influence the success of PPPs. In the final section, we emphasize the differences between financial and socio-economic evaluations of PPP in describing our proposed PPP evaluation framework for highway projects.