The modern era of public-private partnerships began during the Reagan Administration of the 1980's. President Reagan took an ideological cue from Britain's Prime Minister Thatcher and made the discussion of privatization a legitimate part of public policy decision making. Although few actual public-private partnership initiatives took hold during his administration, the stage was set by his vision of down-sized government, the dedication of the managers he brought into government service, and his economic policies that effectively starved governments of the funds they would need to maintain or expand programs.
At the state and local levels, governments were also facing challenges that tested their abilities to provide services themselves. Taxpayer revolts, starting in California, created a wave of attempts to limit the size and reach of governments. While the ability of government to perform was being constrained, demands for services still increased, due in part to unfounded mandates handed down from the federal government, and from the continual pressure from citizens to look to government to improve service quality and quantity. Sometimes, this economic squeeze led local governments to convert services from being paid for by general taxes, to having them supported by fees from the actual users. Self-sufficient service provision provides a good foundation for public-private partnerships.
That confluence of policy and economic prerogatives created a fertile environment for the development of public-private partnerships, which began to flourish, albeit not without the fierce resistance of government employee unions. Since that time, governments at all levels in the U.S. have seen the benefits of incorporating private sector resources into their kit of tools for providing services to their citizens. Even the switch of national government to the Democrats in 1992 didn't derail public-private partnerships, as the centrist Clinton Administration read the public mood (as the Blair Labor government did in Britain) and didn't unwind the momentum gained by public-private partnerships in the previous dozen years. Even Clinton's program for the reform of the federal government, the National Performance Review, had a strong place for public-private partnerships in its structure.
With the ascendancy of the new Bush Administration, whose ideology and economic policies return with force to those of the Reagan '80's, there will be a renewed interest in public-private partnerships of all kinds, and a greater reliance on the private sector in the future. The administration has already announced its intention to reduce the federal workforce by 600,000 through outsourcing and other forms of public-private partnerships. Practicality and this federal resolve will force all levels of government to clear the way for more involvement of the private sector in the delivery of public infrastructure and services.