What triggers public-private partnership (PPP) renegotiations in the United States?

Abstract

Public-private partnership (PPP) renegotiations and their outcomes have been studied extensively in Latin America and Europe but not in the United States. Therefore, this study evaluates factors triggering U.S. PPP renegotiations by examining six highway PPPs located in California (2), Indiana (1), and Virginia (3). The findings suggest exogenous macroeconomic shocks, project and political complexity, and institutional inexperience are the most compelling triggers behind U.S. PPP renegotiations. These findings also highlight America’s distinct political and institutional environment – i.e. favourable to buy-outs as well as debt restructuring via bankruptcy – as a possible explanation for the absence of opportunism among U.S. PPP renegotiations.