Policy makers can learn much from their peers' experiences-both good and bad. Our analysis of Pennsylvania's experience, informed by other domestic and international public-private partnerships, reveals a number of lessons other states may want to apply as they continue to investigate the feasibility of these deals for themselves:
• Passage of enabling legislation that establishes the state's general interests and terms for a public-private partnership before negotiations begin can help set the ground rules and be a valuable tool as a state considers a specific proposal. This helps ensure that policy makers have thoroughly debated the pros and cons of public-private partnerships and allows for more efficient and informed consideration of a particular proposal. Nearly half the states have adopted such laws.
• Transparency and inclusion are crucial to achieving buy-in from stakeholders. The state must strike the appropriate balance between protecting bidders' proprietary information and sharing enough details that policy makers and the public understand both the short- and long-term implications of the deal.
• A state's decision makers must have a clear understanding of the principal goals for a public-private partnership in the area of infrastructure, because different goals will require different tradeoffs. A state pursuing a lease primarily for immediate financial gain, for example, may be willing to extend the lease for more years and give the private operator greater ability to raise tolls if that will result in a higher upfront payment.
• A proposed deal must be based on realistic financial assumptions.
• A well-planned public-private partnership proposal must thoughtfully and specifically describe how the revenues a lease will generate will be invested and spent, and how the private operator's performance will be monitored.
• A long-term deal deserves a long-term perspective. As policy makers debate the pros and cons of a public-private partnership, they should consider a long-term lease's effects on the economy, the environment and the next generation of taxpayers.