An Examination of State-Level Public–Private Partnership Adoption: Analyzing Economic, Political, and Demand-Related Determinants of PPPs

Abstract

This study examines the influence of economic, political, and demand factors on the adoption of public–private partnerships (PPPs) from 2000 to 2016. State debt, urban travel demand, and state laws allowing unsolicited PPP proposals have a significant effect on PPP adoption. Counter to previous studies that suggest conservative state governments adopt PPPs at a greater rate than liberal governments, we find that the influence of political ideology on PPP adoption is contingent upon state legislative professionalism. For states with high legislative professionalism, a change in state government ideology in the liberal direction decreases the likelihood of PPP adoption. For states with low legislative professionalism, a change in state government ideology in the liberal direction increases the likelihood of PPP adoption. The results inform the study of politics of privatization by demonstrating how ideological preferences can be shaped by the legislative capacities of state governments.