Public or Private?

Goods and services-even infrastructure-are public, private, or publicly-provided.[vii] So, what's best-public or private? Both, of course In the United States, Europe, Japan, and increasingly throughout the world, private industry provides most of the goods and services we consume through a free market economy-our morning coffee, our clothes, the buildings in which we work, and our weekend entertainment. Purely private goods are characterized by excludability and "rivalrousness" .[viii] For example, when you drink your morning coffee, enjoy those front-row concert seats, or wear your spiffy new shirt, no one else can enjoy that particular treat at that particular time.

It's difficult to define a purely public good- even certain aspects of tax-collecting have been contracted to private entities. A lighthouse, which is a public good[ix], could still be built or operated privately. In fact, one of the first public-private partnerships of the newly formed United States was construction of a lighthouse at the mouth of the Chesapeake Bay.[x]

The area between "public", and "private", is the land of the public-private partnership (PPP, P3 or P³).

Benefits of public-private partnerships touted by proponents include:

• Risk transfer from public to private

• Expediting of projects through private financing (moving them off the public's "balance sheet")

• Single-point of control and responsibility via concessionaire

A PPP is a complicated agreement and perhaps the above-listed "benefits", don't hint enough at the partnership aspect.

The National Council for Public-Private Partnerships defines a public-private partnership as a contractual agreement between a public agency (federal, state, or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.[xi]