Assessing the Contributions of Collaborators in Public–Private Partnerships

Abstract

Partnerships that bring together public, private, and nonprofit organizations have become widely used by local governments. But we lack knowledge about the distinct contributions of collaborators to the partnership. This study uses tax increment financing (TIF) in Dallas, Texas, to assess the distinctive roles of public and private partners in achieving mutually beneficial policy outcomes. We find that, while public investment is essential to the partnership’s success, private investment directly increases property values. The city’s greatest contribution is to leverage private investment to create added taxable value in the TIF district. The increased property value provides revenue that is used for public purposes benefiting TIF district occupants. As with other quasi-private institutions that have gained popularity in the new order of governance, the appeal of TIF is its capacity to create public goods with bounded benefits. In addition, both institutional and operational knowledge contribute to the partnership’s success. The city’s experience at establishing new TIF districts and administering existing ones increases taxable value.