The following email thread may be of interest to readers interested in how to increase governmental capacity to administer public-private partnerships. This is a research area that is wide-open for new thinking and inquiry.

ORIGINAL EMAIL FROM R. ORR:

I am now thinking about starting from scratch, on a new paper that would address a pair of more fundamental research questions: (A) Does the PPP model have a role for U.S. state and local governments? and (B) If so, how should it be administered?

In response to the first question I would describe the PPP value proposition as it has been articulated in the UK and Canada (i.e. value for money = innovation, lifecycle costing, and competition) and also review the key differences between the U.S. and UK/Canadian contexts/environments that would influence whether or not the value proposition could be achieved here. In response to the second question I would discuss the pros and cons of four different PPP program modalities (listed in order of increasing coordination by the state):

1 - Ad Hoc Administration (i.e. no attempt at coordinated administration of any kind, this is the scenario in many U.S. states today),

2 - Center of Excellence (i.e. a state-level entity to provide education, resources, best practice, advice, assimilation of lessons learned, etc., but with decentralized administration of PPP contracts by each state agency + local governmental unit),

3 - Service Agency (a state-level entity to actually administer PPP contracts on behalf of state and local agencies who decide they need assistance and who come to the state-level entity to request help, similar to Infrastructure Ontario), and

4 - Superagency (centralized administration + authority to approve projects!)

COMMENT FROM R. NOLL:

Regarding the fourfold categorization, I think I see three dimensions, not one:

1. Degree of centralization of decisions in the agency - from advisory to approval of submitted plans to initiator of plans and allocator of a state controlled budget.

2. Scope of responsibility - from one substantive area (e.g., transport, E&S education, water, ets. Let S be the number of substantive areas and N be the number of PPP coordinating entities. Where is N between 1 and S? If N<S how should substantive areas combined?

3. Vertical versus horizontal responsibility -That is, a state agency to deal with state programs (each with its own functional state agency), versus a state agency for dealing with cities, counties, and/or regional authorities. I am less convinced that the state has a useful role for Bay Area transportation than for small local governments. Note that in some cases the issue is mainly coordination, and for others it is mainly scale. A small rural county is not likely to be very good at anything, no matter how hard it tries to coordinate functional areas, whereas LA County may be able to do better than the state (because of local knowledge and influence).

Posted by rjorr at May 11, 2008 4:35 PM