Over the past few decades, governments throughout the world have been highly motivated to utilize public-private partnership (PPP) as an innovative method for delivery of public infrastructure because of the strong demand for these expensive projects and the fiscal constraints faced by many jurisdictions. A vast literature has emerged to elaborate the reasons to utilize PPP, as well as notable concerns. Less well understood is how the adoption of PPP is determined. This study focuses on PPP as an “innovative finance” approach in transportation development, and seeks to explain the determinants for a government to adopt such innovation. We use data on PPP toll road activities in the State of Virginia (the earliest and most active adopter of PPP tolling in the US) during 1988-2010 to explore this research question.

We adopt Berry and Berry’s (1990) model of policy innovation and diffusion based on Mohr (1969), who posits that the probability of innovation is directly related to the motivation to innovate, inversely related to the strength of obstacles to innovation, and also related to the availability of resources for overcoming such obstacles. This Motivation-Obstacle-Resource model has been widely adopted to explain state and local policy innovations. Specifically in the context of PPP in transportation development, we examine (1) motivations to innovate including transportation demand, economic factors, political ideology and project risk allocation; (2) obstacles to innovation consisting of organization resistance and inertia, political/public opposition, and agency inexperience; and (3) resources for innovation including state wealth, state and organization sizes, relevant legislation and policies, service market conditions, policy diffusion within and among states, and professional consultancy.

Then we explore this model with a multiple-case study by analyzing a set of toll road projects in Virginia (US) since 1988, including successfully built PPP projects and projects that the state planned to build as PPP but failed to do so. We build a database for each project and collect information from multiple sources to ensure accuracy. Our information sources include academic papers, government reports, relevant program/project documentations from the projects’ official websites, archival news reports, and interviews. Collected information includes project background, project basics, partnership information, contract terms, and encountered risks.

In a word, our research aims to answer a question with both theoretical and practical importance: what factors determine the adoption of PPP under the US transportation context. We reflect on the original framework by considering the following questions: what factors matter, what factors do not matter and why, and what important factors have been missing from the original framework. The research results would offer timely and practical policy implications on building and improving successful PPP for governments worldwide that are experimenting with PPP for transportation and other infrastructure financing.

References:

Berry, F.S., & Berry, W.D. (1990). State Lottery Adoption as Policy Innovation: An Event History Analysis. American Political Science Review, 84(2), 395-415.

Mohr, L.B. (1969). Determinants of Innovation in Organizations. American Political Science Review, 63(1), 111-126.