When Privatizing Met Public Infrastructure

As readers of this blog know, I’m not a “believer” in contracting-out–what we Americans quaintly call “privatization.” I’m not necessarily opposed to contracting, either–it’s a tool that can be appropriate in many circumstances. Call me an agnostic.

It’s important to examine claims about privatizing, because contracting is too often a form of patronage–a way of rewarding campaign contributors–or, as we’ve seen in Indiana, a way that canny politicians can borrow from the future to provide services that should be paid for from current tax revenues.

When we start privatizing public infrastructure–toll roads and parking meters, for example–it is even more important to ask what the research shows. We know what the politicians who are pushing these deals say; what does the evidence say?

Ellen Dannin is a law professor who is a national expert on contracting, and she has just published an important (and sobering) analysis of what happens when public infrastructure is privatized. In “Crumbling Infrastructure, Crumbling Democracy: Infrastructure Privatization Contracts and Their Effects on State and Local Governance,”
Dannin finds that these agreements typically make the public the guarantor of private contractors’ profits, and ” give private contractors quasi-governmental status, with power over new laws, judicial decisions, propositions voted on by the public, and other governmental actions.”

Well worth a read!