RETHINKING21ST - CENTURY 

GOVERNMENT: PUBLIC-PRIVATE

PARTNERSHIPS ANDTHE NATIONALINFRASTRUCTURE BANK

2

The Social Science Research Council (SSRC) leads innovation, buildsinterdisciplinary and international networks, and focuses research onimportant public issues. We bring necessary knowledge to public action.

The Center on Law & Public Finance, based at the SSRC and the Institute for Public Knowledge at New York University, assesses policy programs, financing devices, contractual arrangements, specific projects, and industry trends as they relate to public works.

Authors: Michael Likosky, Josh Ishimatsu, and Joyce Miller

June 2011This work may be freely republished, redistributed, and used by others, provided that (i) it isfor non-commercial purposes, (ii) the content of the work is not altered, and (iii) the SSRC and the author(s) are properly credited as the source of the published work.

Design: Kate Northern and Debra Yoo

TABLE OF CONTENTS 1 Rethinking the Function of Government

4 Government as Player-Coach

6 The Economic Philosophy of Public-Private Partnerships

8 A Bipartisan Investment Strategy

10 Public-Private Partnerships in Practice

17 Key Challenges and Recommendations

19 National Infrastructure Bank

19 Conclusion

21 Endnotes

23 About the Center on Law & Public Finance

23 About the Authors

4

Inaneraofseverebudgetaryconstraints,howcanthe

federal government ensure that America is investing

in what is needed to promote economic competitive-

ness, broad-based opportunity, and energy security?

Increasingly, public-private partnerships enjoy broad

support as the answer to this question, across party

lines and political divisions. Partnership-driven proj-

ects are pursued today in wide-ranging areas, includ-

ingeducation, transportation, technology,oilandgas,

clean energy, mineral extraction, and manufacturing.

Well-considered partnerships compliment, strengthen,

and reinforce those existing meritorious approaches

carriedoutthroughtraditionalmeans.Theyrepresenta

fundamentallydistinctwayforgovernmenttoaddress

complex challenges, with federal agencies playing a

catalytic role rather than a directive one. A National

InfrastructureBankcanprovide the requisitecapacity

toimplementpublic-privatepartnerships.

ReThINkINgTheFuNcTIoNoFgoveRNmeNT

America is at a standstill. Federal, state, and local

governments are facingoverburdened publicbalance

sheets while enormous sums sit in limbo in pension

fundsandintheaccountsofwhatthemckinseyglobal

Institutehascalledthenewglobalpowerbrokers:Asian

sovereign funds, petrodollar accounts, private equity

funds, and hedge funds.1 It is why President obama

posedthisquestiontohiseconomicRecoveryAdvisory

Boardin2009:

obviouslywe’reenteringintoaneraofgreater

fiscal restraintaswemoveoutofdeepreces-

sionintoarecovery.AndthequestionI’vehad

ispeoplestillgotalotofcapitalonthesidelines

therethatarelookingforagoodreturn.Isthere

awaytochannelthatprivatecapital intopart-

neringwiththepublicsectortogetsomeofthis

infrastructurebuilt?2

unlesswecanshepherdthismoneyintoourproductive

economy,thecountrywillhavetoforegomuch-needed

projectsforlackoffinancing.

Public-private partnerships involve federal

agenciescoinvestingalongsidestateandlocalgovern-

ments, private firms, and nonprofits. having partner-

shipswithinagovernment’stoolboxnotonlybringsa

sizable new source of capital into the market, it also

allows public officials to match assets with the most

appropriate and cost-effective means of financing. If

aclassofexistingandnewprojectscanbefinanced

fromprivatesources, thenwecanbegin todecrease

ourdebtburdenwhilealso investingandgrowingour

economy.Scarcepublicfundsarethenfreeduptobe

spent on essential services and those projects best

financedthroughtraditionalmeans.

Becausethesuccessofpartnershipsdepends

uponcollaborationsbetweengovernmentandprivate

firmsthatmayunderothercircumstancesbeviewedas

raisingconflictsofinterest,arethinkingofthefunction

of government is essential. In a recent opinion piece

intheWallStreetJournal,thepresidentannouncedan

executive order, Improving Regulation andRegulatory

Review,3which“requiresthat federalagenciesensure

thatregulationsprotectoursafety,healthandenviron-

ment while promoting economic growth.”4 The piece,

entitled “Toward a 21st-century Regulatory System,”

“Federal, state, and local

governments are facing overburdened

public balance sheets while enormous

sums sit in limbo.”

5

wasaccompaniedbyanevocativedrawingofa regu-

latorwieldinganoversizedpairofscissorsbusilycut-

tingthroughaseaofredtape.Whilewidelyviewedas

anefforttocurryfavorwithAmericanbusinesses,this

presidentialoutreachcanalsobereadasanindication

that thefederalgovernmentwillsupport—andencour-

age—divergentgroupsworkingtogethertocutthrough

outmoded, counterproductive, or unnecessarily bur-

densomeregulation.

Public-privatepartnershipsareespeciallysuited

tofulfillingtheorder’sdirectivesandcanserveasamodel

forourtwenty-first-centuryfederalagencies.Ifcoming

togetherasateam—publicandprivate,Republicanand

Democrat,progressiveandTeaParty—isaprecondition

notonlytowinningthefuturebutalsotosolvingtoday’s

seeminglyintractableproblems,thenwemusttakethe

taskathandseriously.Diversegroupsmustappreciate

the unique and valuable resources and perspectives

that thosewhoaretheircombatants inothercontexts

bring to the team.governmentagencies,moreaccus-

tomedtoactingasreferee—settingdownbasicrulesof

thegameandconstrainingbehaviordeemedcontrary

tothepublicinterest—mustfindwaysofcoachingthis

unrulybunch,notfromthesidelinesbutasavitalplayer.

goveRNmeNTASPlAyeR-coAch

Ina recentappearanceatgamesaTechnologycorpo-

ration’sfactoryinFairlesshills,Pennsylvania,President

obamacalledattention to thepoliticalchallenge inher-

enttoanylargeundertaking.Thiswasafittinglocalefor

adiscussionof the federalgovernment’sevolving role,

asobamahadhelpedcatalyzeadealwherebythecerro

dehulawindfarminhonduraswouldpurchaseturbine

exportsfromthegamesafactorywithsupportfromthe

export-ImportBankof theunitedStatesand fromthe

centralAmericanBankforIntegration.

A question from the factory floor concerned

the proposed uS Smart grid, an ambitious, expen-

sivenationalproject tocreateamodernized,efficient

nationalelectricitygridthatwouldsaveenergyoverthe

longhaulby reducing thewaste tied toourcountry’s

antiquated distribution network. Asked whether the

federalgovernmenthadplanstolayoutthesubstantial

sumneeded tocarryout thisendeavor, thepresident

gave an answer that might surprise some, explaining

that “the challenge is not so much a money issue.”

Pointing to the fact thatwe“couldprobablygeta lot

ofprivate-sectordollars to invest inasmartgrid,”he

asserted that the challenge was instead a political

one,“allthesedifferentzoninglaws”thatarisebecause

“peopledon’twanttransmissionlines,etcetera,intheir

vicinity.”moreover,“eachstateandeachlocalgovern-

menthas itsowncontrolaboutsiting issues,”sothat

America behaves like a patchwork of interests rather

thanasaunitednation.5

This political challenge is not a light one and

requires working together across diverse interests to

coalesceasa team.No longerable touse thepower

of the purse as primary leverage, government must

identifyitsownuniquecapacitiesasaproblem-solver

withinachangedlandscape,shiftingfromadirectiveto

acatalyticroleinordertoidentifyandamendproblem-

aticregulationthatstiflesinnovationandrestrictseco-

nomicgrowthwhilestrengtheningregulationessential

“Because the success of partnerships

depends upon collaborations between

government and private firms that may

be viewed as raising conflicts of

interest, a rethinking of the function of

government is essential.”

6

toprotectthepublic.coachingfromthesidelineswill

no longerensureawin.governmentwillonlybe fully

engagedandeffective if ithasadirect interest in the

outcome—federalagenciesmustactasplayer-coaches.

Aplayer-coach isamemberof the teamwho

simultaneously holds both playing and coaching

responsibilities.Thechallengesandconstraints faced

by fellow teammemberscanbestbeappreciatedon

thefield,intheheatofplay.Theplayer-coachcanthen

inspire the top individual performance of each player

while keeping everyone’s eyes on the ball, lending a

handwhenhisorherparticularskillsarecalled for.A

player-coachdoesnotembraceagamewithoutrules

noranoverlymanagerialapproachbecauseheorshe

knows first-hand both the value of a game plan and

theneedtoadapt,problem-solve,andinnovateonthe

fly.genuinelyskilledplayer-coachesareabletomove

strategically and seamlessly between their roles as

coachandplayer inawaythatmaximizes the team’s

interests.oneof thebest,BillRussell, found just the

rightbalanceinhissecondseasonasplayer-coachof

theBostonceltics,whenhebeganmakingcarefultar-

geteduseofhis timeoff thesidelinesafter spending

manyminutesonthecourtinhisfirstseason.6

most important, a player-coach agency can

turn opponents into teammates. Too frequently, we

hamstring our ability to work together by tethering

ourdebatesover theappropriate roleand functionof

governmenttophilosophicalpolesofgovernmentand

the economy—such as a night-watchman state or a

keynesian one. These approaches exist in their pure

forms only within textbooks and political discourse.

Today’s pressing challenges demand that we eschew

the litmus-test politics that result from the lionizing

of philosophical puritanism so that we can find com-

mon ground—where traditional regulation and busi-

ness innovation meet— and advance our shared val-

uestogetherinaworkableway.ForAmericatowinthe

future,thegovernmentmustbefullyinthegamewith

trulymodernentrepreneurialpublicagencies thatpro-

motepublicvaluesasagrowthaccelerant.

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FIVE FACTS1. ReinvestmentAct$250mrelocates

NorfolkSouthernRail2. V&Minvests$650mtobuildmill3. Manufactureseamlesstubesforoiland

gasproduction4. SupplyMarcellusShaleNaturalGas(PA,

OH,NY,WVa,MD,VA)5. SpearheadedbyUSSen.Brown,USRep.

Ryan,Gov.Strickland,MayorsYoungstownandGirard,Youngstown-WarrenChamberofCommerce,V&M,OHEdison

“I hope that we all recognize that when we work together and do

things together and check our egos at the door in the best interests of our community, great things

happen.” –USRep.TimRyan

V&M STAR STEEL FACTORY EXPANSION2009-2012

ReinvestmentAct$250mleveraged$650mfromV&M|Youngstown,OH

“Too frequently, we hamstring our

ability to work together by tethering

our debates to philosophical poles of

government and the economy.”

7

TheecoNomIcPhIloSoPhyoFPuBlIc-PRIvATePARTNeRShIPS

Inhis last twoshareholder letters,WarrenBuffet,chair-

manandchiefexecutiveofficerofthelargeholdingcom-

panyBerkshirehathaway, setout thebasiceconomic

philosophybehindpublic-privatepartnerships.Berkshire

has made investing in these partnerships a new core

aspectof itsportfolio,bothoutof a senseof national

dutyandwiththeexpectationofyearsofreliablereturns.

In his 2009 letter, Buffet groups Berkshire’s

electricity and railroad investments in the common

categoryof“regulatedutility.”Arguingthat“itisincon-

ceivablethatourcountrywillrealizeanythingcloseto

its fulleconomicpotentialwithout itspossessingfirst-

classelectricityandrailroadsystems,”heindicatesthat

Berkshire “will do our part to see that they exist.” In

return,Buffetexpects“thisregulatedsectortodeliver

significantlyincreasedearningsovertime,albeitatthe

costofourinvestingmanytens—yes,tens—ofbillions

ofdollarsofincrementalequitycapital.”Inotherwords,

Berkshirecommitstolargesumsofupfrontcapitaland

ongoinginvestmentstohelpdrivetheeconomicgrowth

necessarytogeneratedirectandindirectprofitsinthe

future as individuals and governments become less

cash-strapped.

Buffettakesthepositionthatthebondholding

togetherthelong-termbusinessrelationshipsbetween

Berkshire and “the public” arises from a “social com-

pact.”Itisacompactbasedinpartonpragmatism:“If

either side shirks its obligations, both sides will inevi-

tablysuffer.”Thispragmatismstemsfromenlightened

self-interest:“bothpartiestothecompactshould—and

we believe will—understand the benefit of behaving

inawaythatencouragesgoodbehaviorbytheother.”

Private-sectorcontributionstopublicworksthatbene-

fitallrequire“wiseregulatorswhowillprovidecertainty

about allowable returns so that we can confidently

makethehugeinvestmentsrequired.”7

Thisappealtoasocialcompactisnotaradical

idea.manypresidentshaveturnedtopartnershipsas

away tomobilize theprivatesector. In1981,Ronald

ReaganformedthePresidentialTaskForceonPrivate

SectorInitiatives,whichbroughttogether“leadersfrom

corporations,foundations,andvoluntaryandreligious

organizations” for thepurposeof “promot[ing]private

sector leadershipand responsibility for solvingpublic

needs, and to recommend ways of fostering greater

public-private partnerships.”8 Abraham lincoln’s

Transcontinental Railroad, Teddy Roosevelt’s Panama

canal, and Dwight eisenhower’s National System of

Interstate and Defense highways would all unify the

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FIVE FACTS

1. Electricityandrailroadsgroupedas

commoninvestmentcategory

2. Berkshireinvestslargesumsto

meetproductionshortfalls

3. Expectationofgovernment

partnershipensuresappropriate

returnovertime

4. Socialcompactformutual

advantage

5. EssentialforUScompetitiveness

“It is inconceivable that our country will realize

anything close to its full economic potential without its possessing first-class electricity

and railroad systems.”WARREN BUFFET’S LETTERS TO SHAREHOLDERS

2009,2010

8

nation—and support America’s growth—for genera-

tionsasthefoundationsofatrulynationaleconomy.

Public-private partnerships have also been a

centerpiece of our foreign commercial affairs across

presidencies and parties. In fact, Franklin Delano

Roosevelt’s export-Import Bank and Richard Nixon’s

overseas Private Investment corporation are both

durable partnership-driven foreign-affairs institutions

that together literally wove the World Wide Web with

thelayingoffiber-opticcablesaroundtheglobe.

Increasingly, inourowntime,weseesignsof

politicians and diverse stakeholders working together

acrosspartylinesandpoliticaldivisionsinthespiritof

thissocialcompact toaddressourbiggesteconomic

challenges.eventhemostantagonisticcombatantsare

beginningtoviewpublic-privatepartnershipsasavia-

ble—andnecessary—vehicleforresponsibleregulation

andconstructiveinvestmentinthetwenty-firstcentury.

ABIPARTISANINveSTmeNTSTRATegy

As seemingly unlikely alliances become increasingly

common,wemustmoveaway fromviewing themas

exotic.Instead,greaterattentionshouldbepaidtohow

public-privatepartnershipsthemselvescoalesceother-

wisedivergent interestsandhowgovernmentcanact

asplayer-coach toencourageprivate investmentand

rethinkpublicregulation.Becausespecificpartnerships

may last decades and span changes in political and

corporate leadership, their championsmust forge the

lastingallegianceofgovernments,majorstakeholders,

andthepublicatlarge.

Inastrikingexampleofpublicvaluescrossing

party lines, President obama and former governor of

AlaskaSarahPalinshareanapproachtopartnerships

thatisatoncepragmaticandidealistic.onapragmatic

level, both crusade against economic inefficiencies

tiedtoinsiderdealingbetweenpublicofficialsandpri-

vatecommercialinterests.Theobamapresidencyhas

marked a dramatic shift away from an earmark-dom-

inated system and toward a proliferation of partner-

shipprogramswithinfederalagencies,manyinvolving

“In a striking example of public values

crossing party lines, President Obama and

former governor of Alaska Sarah Palin

share an approach to partnerships that is

at once pragmatic and idealistic.”

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FIVE FACTS1. $600kawardedbySmallBusinessAdmin.

2. Promotessmallhigh-techcompanies

3. FillsgapsinDefenseDept.customerbase

4. Mentors,commercializes,doesbusiness

matchmakingandtechnologytransferring

5. Teammembers:Huntsville/Madison

ChamberofCommerce,UAHuntsville,

AlabamaA&MUniv.,Women’sBusiness

CenterofNorthAlabama,BizTech,

DefenseAcquisitionUniv.,VCSI.

“Showcases our collaboration in

defense technology between government, academia, contractor

and commercial organization”

–HuntsvilleMayorTommyBattle

SBA AWARD TO VON BRAUN CENTER FOR SCIENCE & INNOVATION

June2010SBAInnovationDefenseClusterPilot

Huntsville,AL

9

aninteragencyeffort.Thisshifthasbeencoupledwith

attention towardmerit-basedcriteria forprojectselec-

tion and unprecedented transparency within govern-

ment. Similarly, Palin’s ascendancy to political promi-

nenceinAlaskanpoliticswashardearnedbyweeding

outinsiderdealingswithinthestate’soilsector.

Theiridealismcanbeseenintheirmutualfaith

in a social compact. Both are vigilant in judging the

successofpartnershipsbasedprimarilyon theability

ofprojects tobenefit thepeople.Forobama,partner-

ships are often viewed as ways to leverage the inge-

nuityofordinaryAmericans.Palin’sreformsofAlaska’s

oil sector reinforced the state’s belief that its citizens

shouldtakehomeapercentageoftheprofitsproduced

bypublic-privateprojects.Astatementreleasedbyher

governor’sofficeaboutapartnershipprojectthatPalin

spearheadedcouldaseasilyhavecomefromtheWhite

housepresssecretary:“Thisprojectwillmaximizejobs

forAlaskans,provideaffordablegasforAlaskans,and

maximizerevenueforAlaskansforgenerations.”9

Support for partnerships goes deep into the

benches of both parties. Senator orrin hatch (R-uT)

has spoken of our country’s “belief in public-private

partnerships thatcost thegovernment littleandbring

ahighreturnonthatinvestment.”10ThemayorofNew

yorkcity,michaelBloomberg,anindependent,former

governor ed Rendell (D-PA), and former governor

Arnold Schwarzenegger (R-cA) formed the bipartisan

Building America’s Future, a coalition of governors

and mayors who support infrastructure partnerships.

governorJohnhickenlooper(D-co)advocatespublic-

privatepartnershipsthathave“statewidesupportfrom

stakeholders who understand the increased demand

on our transportation system and the financial chal-

lenges we face” for moving projects forward.11 even

theconservativeAmericansforProsperityisinfavorof

“implementingmorepublic-privatepartnershipstobuild

andexpandroads.”12kochIndustriessupportsarange

ofpartnerships, fromroadprojects,13 tobiofuels,14 to

oil and gas.15 likewise, David koch’s philanthropic

investments to combat cancer helped establish the

Davidh.kochInstituteforIntegrativecancerResearch

at the massachusetts Institute of Technology, which

bringstogether“biologists,engineers,andothersinthe

physicalsciences”toaddresschallenges.Thisinnova-

tiveapproachtoproblem-solvingaimstoinfluencefed-

eral-spending priorities, increasing National Institutes

ofhealthsupport forconvergence-drivenapproaches

in line with emerging federal trends supported by

President obama and his administration more gener-

ally.16Itpointstothedynamismofpublic-privatepart-

nershipsandhowacultureofinnovation,financing,and

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FIVE FACTS1. PalinisaPPPadvocateandreformer2. Trackrecordofweedingoutinsider

dealings3. Promotesbenefitsforcitizens

throughAKtraditionofrevenue-sharing

4. Partners:AlaskaGasDev.Authority,ENSTARNaturalGasCo.,StateofAK

5. Partofbroadenergyportfolioincludingcleanprojects

“The formation of a public/private partnership

will maximize jobs for Alaskans, provide

affordable gas for Alaskans, and maximize revenue for Alaskans for

generations.”GOVERNOR SARAH PALIN

2009Public-PrivatePartnershipAlaskaGasline

Alaska

10

entrepreneurshipcanprovideasafeharbor ina toxic

politicalenvironment.

Thus,inaperiodofoftenimmobilizingpolariza-

tion,public-privatepartnershipsofferapragmaticway

forwardinformedbyaneconomicphilosophythatdoes

not fallneatly in linewithpoliticaldivisionsorspecial

interests.governmentshouldseizetheseopportunities

toserveasacatalystfortheidentificationofcommon

goalsandproductiveavenuesthatcanbringallplayers

togetherasa teamand topromotea teamspirit that

willallow forconstructivecompromisewhen interests

divergeandprovidecontinuityacrosspoliticalseasons.

Buttobeaneffectiveplayer-coachforthesepublic-pri-

vatepartnerships,publicagenciesmustknowboththe

rulesofthegameandhowitisplayed.

PuBlIc-PRIvATePARTNeRShIPSINPRAcTIce

Although partnerships are a well-established way for

politicians, businesspeople, and nonprofits of various

stripestoworktogether, littleattentionhasbeenpaid

to defining what public-private partnerships are, how

theyworkinpractice,andthedistinctrolesplayedby

thefederalgovernment.Atthecenteronlaw&Public

Finance, we reviewed this approach across sectors,

includingcommercialaffairsbothathomeandabroad,

andacrosshistoricalperiodsdatingbacktoAmerica’s

founding, paying particularly close attention to party

commonalitiesanddifferences.Wealsodidextensive

surveysofpartnershipsinvolvingforeigngovernments

andinternationalorganizations.17

Because partnerships are deployed across

agenciesandtimeandunderarangeofcircumstances,

most employ a multi-pronged strategy. our research

revealed ten common features of public-private

partnerships:

1. Coinvestment—The federal government coinvests

alongsidestateandlocalgovernments,privatefirms,and

nonprofits.

2. Cooperation—Public andprivate teammemberswork

together over the life of a project, from conception to

planning,building,operating,andmaintaining.

3. Collaboration—Cross-sector approaches are used to

bustsilos.

4. Maximization—Programsandprojectsaredesignedfor

highreturnsonfederalinvestment.

5. Measurement—Project selection involves rigorous,

analytical,metric-basedprocesses.

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FIVE FACTS1. Dept.ofAgriculture9003Biorefinery

LoanGuaranteeProgram2. Largesteverbiofuelfacility3. Biggestplannedcellulosicethanol

plantinUS4. Est.300localconstructionjobs,700

regional5. SupportfromGreeneCo.Commision,

IndustrialDev.Auth.,Gov.Riley,SenatorSessions,SenatorShelby,formerCongressmanDavis,Coskata

“We look forward to working with the USDA and investment partners . . . to help reduce the country’s

dependence on foreign oil, and create significant economic growth for the

people of Alabama.”–WilliamRoe,CEOCoskata

COSKATA BIOREFINERGY2011

$250mUSDALoanGuaranteeforFacilityConstruction|GreeneCo.,AL

11

6. Competition—Federalsupport isawardedbasedupon

competitiveprocesses.

7. Innovation—Innovative approaches to research and

development, design, anddeliveryareencouragedand

rewarded.

8. Improvement—Existing programs are continually

improved,andnewprogramsarecontinuallycreated.

9. Pragmatism—Problem-solvingmethodsareapplied.

10. Flexibility—Programs and projects adapt as circum-

stancesdemand,focusingonlong-termproblemswhile

anticipatingshort-termresults.

Partnershipsmay incorporatea fewormanyof these

featuresindifferentcombinationsasprojectsevolve.

Thecentralroleofgovernmentinpublic-private

partnershipsistoidentifypublicneedsandfacilitatepri-

vateinvestmentinthoseareas.Byusingmodestsums

as leverage, government—acting as player-coach—

canrecruittherightplayersfortheteamandelicitthe

best performance from each position. We found that

government generally relies on seven financial tools

to stimulate and target investment in public-private

partnerships:

1. Matching grants

2. Guarantees

3. Loans

4. Insurance

5. Tax credits

6. Interest subsidies

7. Innovative bond vehicles

Thesefederaltoolsareoftenusedinconjunctionwith

stateandlocalinstruments.

government can also provide effective lead-

ership through non-financial tools, much like when a

playercallsfortheballwhenthere’sanopenshotora

coachdraftsanewplayertotheteamwhoupsevery-

one’s performance, gives an inspiring halftime locker-

roompeptalk,ororchestratesasuccessfullyexecuted

game plan. Federal agencies typically support public-

privateundertakingsinsixprimaryways:

1. Promotion—Event planning, international networking,

roadshows,high-leveladvocacy,marketaccess,oppor-

tunityidentification,andvideoconferencing

2. Expertise—Expertadvice,policyconsultation,andsecu-

rityassistance

3. Information and analysis—Commentaries, data-

bases,directories,guides,libraries,marketprofiles,and

publications

4. Research and development—Feasibilitystudies

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FIVE FACTS1. In2006,GamesaconvertsUSSteel

acreagetomanufacturewindturbines2. Ex-ImBankbacksGamesa’sexportof

51windturbinestoHondurasfor20113. $159mdirectloanfromnewcarbon-

policyincentives4. USFederalfundsleveragedwith

CentralAmericanBankforIntegrationCoinvestment

5. ExportstotheCerrodeHulaWindFarm

“Ex-Im Bank is committed to helping companies

such as Gamesa export to more customers in

more countries to expand US employment in these

industries.”–FredHochberg,Chairman,Export-ImportBankoftheUnitedStates

EXPORTING PA WIND ENERGY 2011

51WindTurbinestoHondurasFairlessHills,PA

12

5. Education and training—Programsandmaterials

6. Legal support—Legal assistance in ensuring compli-

ance,disputesettlementarenas,andlegislativeadvocacy

overseas

most agencies have at least one substantial

public-private partnership program already in place,

andanumberofstandaloneentitiesdevotethemselves

exclusively to thisapproach,but there is littlesystem-

atic learning between programs. honing the federal

government’sability to implementpartnerships follow-

ingastandardplaybookwill increasecapacityacross

agenciestodeliverbeyondwhatarenowoftendiscrete

programsandprojectsandhelprepurposeagenciesto

domorewithlessresources.

ExtractivesPartnerships

Bothathomeandabroad,thefederalgovernmentuses

public-private partnerships within the extractives sec-

tortoaidinthepursuitofoil,gas,metals,andminerals.

Theseprojectscanbeambitious,involvingmanycoun-

triesorstategovernments,aswellasnetworksofpri-

vate financiers, contractors, and subcontractors, and

thereforeexactingattentiontoplanning,financing,con-

struction,operation,andmaintenance isoftencritical.

Becauseextractivespartnershipscanlastfordecades,

they must be resilient and oriented for the long term

throughcarefulcontracting,withpublicagenciesplay-

ing key roles throughout a project lifecycle, from the

identificationofanopportunity,totendering,extraction,

anddistribution.

Intheforeigncontext,ourmostactivefederal

entities include theexport-ImportBankof theunited

States (ex-Im) and the overseas Private Investment

corporation (oPIc). Both promote uS foreign-com-

mercialpolicyaimsbypartneringwithAmericanfirms

on projects overseas. Support provided includes fea-

sibilitystudies,loans,loanguarantees,insurance,and

assistance forsmallbusinessesexportingkeyproject

components. Through their involvement in projects

taking place in other countries, ex-Im and oPIc by

extension partner with foreign government agencies

and firms as well. The united States is also involved

intheextractivessectorthroughourrelationshipswith

international agencies and banks, such as the World

Bank group’s International Finance corporation and

multilateral InvestmentguaranteeAgency, theAfrican

DevelopmentBank,theAsianDevelopmentBank,and

theInter-AmericanDevelopmentBank.

Domestically, a range of federal entities are

activelyengagedinextractivespartnerships,including

theDepartmentoftheInterior,theDepartmentofenergy,

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“By increasing renewable energy output at existing hydropower facilities, we can create clean energy jobs, bolster our nation’s

economic competitiveness, and contribute to America’s

diverse energy portfolio.”–EnergySecretaryStevenChu

ABIQUIU HYDROPOWER PROJECT2009-2011

Uses50/50public-privatefundingforlow-flowturbine|NM

FIVE FACTS1. EnergyDepartmentReinvestmentAct

Hydropowerproject2. $4.5mgrantleveraged$4.5mfrom

privatesector3. Low-flowturbineincreasesfacility

capacityby22%4. Power1,100homes,supplyLos

Almos,CountyincludingDoElab5. SpearheadedbySen.TomUdall

(D-NM)

13

theDepartmentofcommerce,theoccupationalSafety

and health Administration, and the environmental

Protection Agency. Because these projects are often

carriedoutbyspecificstatesandcaninvolvedistribu-

tion through multi-state pipelines, state agencies are

keypartnersalongwithprivatefirms.Thissectorcarries

implicationsfortheglobalextractivesmarketandcan

alsohaveaheavyandfar-flungimpactontheenviron-

ment,so the federalgovernment is implicitly involved

whenever and wherever extraction occurs within our

borders,whetherthepartnershipisformalizedornot.

InfrastructureandClean-EnergyPartnerships

Public-private partnerships in the infrastructure and

clean-energysectorsareabasicfeatureofourforeign

anddomesticaffairs.likeextractivespartnerships,they

areoftencomplex,whichdemandscarefulcontracting

and close, coordinated attention through all project

stages.TheunitedStateshasbeenmuchmoreactively

involved in infrastructure and clean-energy partner-

shipsabroadthanathome,participatingthroughmany

ofthesamefederalentitiesandinternationalchannels

thatconnectustotheglobalextractivessector.

Domestically, we pursue infrastructure and

clean-energypartnershipslargelythroughfederalagen-

ciesthatoperateonlyinspecificareas.Thissiloapproach

doesnotallowformuchcross-agencycapacitybuilding

and knowledge sharing and limits our ability to lever-

ageprivateparticipation toproduce thegreatest gain.

examplesofpartnershipprogramsininfrastructureand

cleanenergyincludetheDepartmentofTransportation’s

Transportation Infrastructure Finance and Innovation

Act program for roads and other transportation proj-

ectsaswellastheDepartmentofenergy’s1603,1703,

1705, and ATvm (Advanced Technology vehicles

manufacturing) programs geared to clean-energy pro-

duction.likewise,ourNationalBroadbandPlan,admin-

isteredbytheFederalcommunicationscommission,is

partnership-driven. Partnerships play a part in biore-

fineries programs administered by the Department of

Agriculture,areutilizedbytheDepartmentofcommerce

initscarryingoutoftheAmericacomPeTeS(creating

opportunities to meaningfully Promote excellence in

Technology, education, and Science) Act, which sup-

ports infrastructure investment in science parks, and

are involved in the infrastructureaspectsofanumber

of Regional Innovative cluster initiatives spearheaded

bytheSmallBusinessAdministration, theDepartment

of Defense, the Department of Agriculture, and the

Departmentofenergy.

Some of our infrastructure and clean-energy

partnershipsare interagencyefforts,withperhapsthe

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FIVE FACTS

1. PacificGas&ElectricCompany

contractstopurchaseoutputfor25

years

2. DOEloantoward$967millionof

total$1.719billioncost

3. 1705DepartmentofEnergy

program

4. Createupto400constructionjobs

5. Avoid417,700tonsCO2annually

“This type of development can lead

the way for other industries to consider

Maricopa.”–DaniellaCasey,CityofMaricopaAGUA CALIENTE SOLAR PROJECT

AgreedJanuary2011USDoE$967mloantoconstruct290MW

solarfacility|Maricopa,AZ

14

most ambitious being the National export Initiative,

which President obama established with the aims of

doubling uS exports in the next five years and add-

ing two million American jobs. This initiative involves

the Departments of Agriculture, commerce, labor,

State, and the Treasury. The office of management

andBudget,theofficeoftheuSTradeRepresentative,

theAssistanttothePresidentforeconomicPolicyand

DirectoroftheNationaleconomiccouncil,theNational

Security Advisor, the council of economic Advisers,

ex-Im, oPIc, the Small Business Administration, and

theuSTradeandDevelopmentAgencyareallactively

coordinatinginthiseffort.Aswithothermajorpartner-

ships, the National export Initiative is an attempt to

leveragethefederalgovernment’sabilitytoworkacross

agencies,withstateand localgovernments,andwith

theprivatesectortoadvancethepublicinterest.

SpecializedPartnerships

A number of modest but important interagency initia-

tives have been established to break down silos and

address pressing challenges with modest federal

resources. one of the most significant, the healthy

FoodFinancingInitiative,isspearheadedbyFirstlady

michelleobama.Althoughitissmallerthanmanypart-

nershipprograms,thisinitiativeisamodelprogramwith

its carefully defined public purpose, high leveraging

ratios,cooperativeapproach,andattention to impact

upon beneficiaries. It mobilizes the resources of the

DepartmentsofAgricultureandtheTreasuryandworks

closelywithstateandlocalgovernmentsandalsothe

privatesectortocatalyzeinvestmentsingrocerystores,

small businesses, and communities within economi-

callydistressedareas inorder toeliminate food “des-

erts”wherethereisnofreshproduceorhealthyafford-

able food available. Another effort, the Partnership

for Sustainable communities, led by the housing

and urban Development Agency, the Department

of Transportation, and the environmental Protection

Agency,aimstomake“development,housing,energy,

and transportation policy go hand in hand.”18 Dr. Jill

Biden, thewifeofvicePresident JoeBiden, is spear-

heading the Strengthening our military Families cam-

paign,a jointeffortbytheDepartmentsofAgriculture,

Defense, education, health and human Services,

labor,andcommercetopromotecareeropportunities

foruSveteransandincreasechildcareoptionsformili-

taryfamilies.

Some independent federal entities devote

themselves to partnership-driven approaches. For

instance, obama recently brought the Administrative

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FIVE FACTS1. Address‘fooddeserts’ineconomically

distressedareaswithlittlefreshproduce2. 23.5mpeople(6.5mchildren)livefar

fromfreshfood3. Leveragecoinvestmenttogrowhealthy

options,createjobs4. Establishmarketopportunitiesforfarmers

andranchers5. PartnershipwiththeDepts.ofAgriculture,

Treasury,andHealthandHumanServices;State/Localgov.;privatesector

“With a modest initial

investment of about $400

million a year, we’re going to

use that money to leverage

hundreds of millions more

from private and non-profit

sectors to bring grocery stores

and healthy food retailers to

underserved communities all

across this country.”

MICHELLE OBAMA’S HEALTHY FOOD INITIATIVE

February2010$400mavailabletoleveragebringing

fresh,affordablefoodtopoorareas

15

hiatus, re-christening it as “a public-private partner-

shipdesigned tomakegovernmentworkbetter”19by

improving administrative processes on a consensus,

non-partisan basis drawing from government, the pri-

vatesector,andacademia.otherfreestandinginitiatives

includethecouncilofgovernors,whichworkswiththe

presidenttofashionresponsive,innovativesolutionsto

challenges facedbystates,and theAdvisorycouncil

onFaith-BasedandNeighborhoodPartnerships,which

aimstoensurethatgovernmentandlocalcommunities

benefitfromtheresourcesoffaith-basedentities.

Within agencies, many partnership initiatives

address domestic and international challenges. The

commerce Department aggressively deploys partner-

shipsbothdomesticallyandinternationallythroughits

Trade Informationcenter,manufacturingandServices

unit, uS commercial Service, and Buy uSA program.

TheDepartmentofeducation’sRaceto theTopFund

isapartnershipprogramdesigned toharnessprivate-

sectorandnonprofitenergy,capacity,andcommitment

to address seemingly intractable inequalities within

the k-12 sector. Structured differently, No child left

Behind is an education-partnership model put into

practice during george W. Bush’s presidency. Within

the State Department, which itself has many partner-

shipprograms,includingtheForeignmilitaryFinancing

and Direct commercial Sales programs, a global

Partnershipinitiativehasbeenestablishedtobringthe

skills and expertise of private firms and nonprofits to

bearoninternationaldevelopmentefforts.TheDefense

Departmenthasalsobeenacentralplayerwithinpart-

nership approaches, from its participation in the cre-

ationoftheInternettotheDefenseSecuritycooperation

Agency’sForeignmilitarySalesprogram.Similarly,the

Department of Agriculture has its commodity credit

corporationandalsotheForeignAgriculturalService.

keychAlleNgeSANDRecommeNDATIoNS

given the increasing utilization of public-private part-

nerships to address pressing problems while weath-

ering a long-term budgetary crisis, it is productive to

focus attention on making them work better. We see

threekeyrecurringchallengesforourfederalagencies

astheyimplementandrefinepartnerships:

1.IncreaseCapacitytoAssess,Structure,and

OverseeProjects

Becausepartnershipprogramsengenderashiftinthe

roleandfunctionofgovernmentandintroducecomplex

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FIVE FACTS1. Unitesbus.leaders,economicdev.

professionals,govt.officials2. Southeastasregionalworld-class

aerospaceandaviationcorridor3. Advocatepolicies,programsand

aerospaceprojectsatlocal,state,andnationallevels

4. Usescommonassets/strengthsinaerospacetopromoteregion

5. GovernorsRiley(R-AL),Barbour(R-MS),andJindal(R-LA)

“We will work togehter to advocate for policies, program

and specific aerospace projects on the local, state and national level. The programs we attract

will in turn attract suppliers, bringing even more jobs and

devlopment.” –AL.Gov.Riley

THE AEROSPACE ALLIANCE2009

501(c)(6)Public-PrivateOrganizationAL,LA,MS

16

financialandcontractual instruments,publicagencies

often lack thecapacity toassess,structure,andover-

seeprojects.Torealizethefullbenefitsofpublic-private

partnerships,thiscapacitymustbeputinplaceacross

thefederalgovernment.

2.ImproveInteragencyCoordination

many of our most pressing economic and societal

challenges require policy solutions that integrate a

range of sectors, including water, transportation, and

energy. however, our federal agencies typically oper-

ate in sector-based silos, which often leads to unco-

ordinated sector-specific policies that only aggravate

existingproblems.Tomaximizetheefficienciesoffered

bypublic-privatepartnerships,theremustbeincreased

knowledgesharingandcoordinationamongagencies.

3.ImproveRelationsBetweenFederalAgencies

andStateandLocalGovernments,PrivateFirms,

andNonprofits

Projectscanstallbecauseapartnercannotwithstand

criticismorelsedigsinitsheelsorbecauseofalackof

adequate funds.Forpublic-privatepartnershipstobe

viableoverthelongterm,agenciesmustactasplayer-

coach to coalesce combatants as a team, recognize

the unique contributions of each player, and explore

solutionsthatleveragenon-financialresourcestomake

publicbudgetsstretchfurther.

To increase the partnerships capacity of pub-

licagenciesandpreparethemfortheirrolesasplayer-

coaches, we make the following institution-building

recommendations:

1.Cross-AgencyReviewandIdentificationof

BestPractices

A survey and assessment of the existing landscape

should be performed to identify lessons learned that

canserveasabaseline formodelingpartnershippro-

grams. This review should look not only at domestic

programsbutalsoatthoseoverseas.

2.BestPracticesPool

onceabaseline isestablished,abestpracticespool

should be created to serve as a repository of knowl-

edgeandexpertiseonpartnerships, includingcandid

advicetopublicofficialsonfinancingandcontracting

and interfacing with state and local governments as

wellasprivatefirmsandnonprofits.Thispoolmustbe

createdin-housetoprotectthebroadplayer-coachper-

spectiveofpublicagenciesfromtheself-servingview-

pointsofindividualplayers.

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FIVE FACTS

1. $3minfederalfunding

2. Nolocaltaxdollars

3. Maintenanceandrevenuegeneration

theresponsibilityofAltaBicycle

Share

4. 4municipalitiesinvolved—eachcity

hasuniquearrangementwithAlta,

ridersnotimpactedbydifferences

5. Bikelanesinstalledbyfourcities

withpublicsupport

“Bike share is a key part of my vision

to make Boston a sustainable, healthy city.”

–BostonMayorThomasMeninoBOSTON AREA HUBWAY BIKE SHARING PROGRAM

2011BIXIsellsbikestoAltaBicycleShare,citiesallowrackinstallation|Boston

17

3.Portfolio-BasedApproach

Toensurethatthepartnershiptoolsandpracticesthat

agencieschoose to implementareappropriate to the

task at hand and lead to positive outcomes, the fed-

eral government should establish a portfolio-based

approach to its public-private partnerships that will

allow for assessment of the impact of projects on

beneficiaries,bothprojectbyproject andasawhole.

Attentionmustbepaidnotonlytohowpartnershipsfit

with one another but also to how they relate to non-

partnership-basedinitiatives.

NATIoNAlINFRASTRucTuReBANk

The success of public-private partnerships—and we

argue, of America’s economic recovery and revitaliza-

tion—willhingeon the federalgovernment’sability to

leveragesizeablesumsofprivatecapital foreffective

investment in public infrastructure and to meet the

key partnership challenges outlined in this report. A

National Infrastructure Bank would provide the requi-

sitecapacitytofinance,contract,andoverseecomplex,

large-scaleprojectsonanindividualbasisandaspart

ofabroadportfolio.

As an independent entity not sitting under a

specificfederalagency,aNationalInfrastructureBank

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FIVE FACTS

1. EndorsementsfromTom

Donohue(CEO,USChamberof

Commerce),RichardTrumka

(President,AFL-CIO)

2. $10bleverageasmuchas

$640boveradecade

3. Movestowardself-sufficiency

4. Loansandloanguarantees

5. On-balancesheetfinancing

BIPARTISANBUILDACT

“By channeling large pools of new investments from private sources that don’t

currently invest in US infrastructure, a bank could help solve our infrastructure deficit without straining our budget. We need to do more

with less federal money.”–SenatorJohnKerryandUSChamberCEOTomDonohue

AMERICAN INFRASTRUCTURE FINANCE AUTHORITY

March2011

Leveragesprivatecapitaltobuildtransportation,energy,waterprojects.Bipartisansponsors:

SenatorsKerry(D-MA),Hutchinson(R-TX),Graham(R-SC),Warner(D-VA).

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FIVE FACTS

1. Multi-SectorBank

2. Attract$500billionnewprivate

dollarsoveradecade

3. Generatenearly2millionjobs

4. Meritmetric-safety,homeland

security,cleanenvironment,

strengtheneconomy

5. Fundtheinfrastructureplatformfor

attractingbusinessesandjobs

“to reclaim our dream and restore prosperity” –BarackObama

PROPOSES A NATIONAL INFRASTRUCTURE

REINVESTMENT BANK

February2008Onthecampaign|Janesville,WI

18

wouldbeabletomakedecisionsbaseduponthemer-

itsofproposalsratherthanpolitics.Itsindependence

would allow the bank to survive transitions in politi-

cal leadership at the federal, state, and local levels,

essentialforensuringthatpartnershipprojects,which

can run fordecades,aredurable.To remainattuned

totheunderlyingpublicneedsthatdriveshiftswithin

leadership,thebank’sgovernanceshouldincorporate

theparticipationofboardmembersrecommendedby

bothparties.

Such a bank would be along the lines of the

bipartisanAmerican InfrastructureFinancingAuthority

described in the BuIlD (Building and upgrading

Infrastructure for long-Term Development) Act intro-

ducedearlierthisyearbysenatorsJohnkerry(D-mA),

kayBaileyhutchison (R-TX),lindseygraham (R-Sc),

andmarkWarner(D-vA),withtheendorsementofthe

AFl-cIoandtheuSchamberofcommerce.20Italso

wouldresembletheproposalmadebyPresidentBarack

obamaonthecampaigntrail inJanesville,Wisconsin

onFebruary13,2008whichfocusedonhowanational

infrastructurebankcouldfinanceaninfrastructureplat-

form toattractbusinesses, jobs,and tobroadeneco-

nomic opportunity.21 These proposals are both espe-

cially appealing in their focus on leveraging private

dollars tofinanceprojectsacrossmultiplesectors,as

wellasaninclusionofdistressedandruralareas.

coNcluSIoN

our public life is bombarded by stories of a broken

Washingtonandofgreedand“me-firstism” in thepri-

vate sector, especially within our financial institutions.

Toooften,wepunisheffortstoworktogetherasateam,

castingitastriangulation,lackofprinciple,orbeingin

thepocketofonespecial interestoranother.Wemay

beforgivenforthisimpulse,foraskepticismtowardthe

idea that public-private partnerships could genuinely

advance thepublic interest, givennotonly thedepth

of the financial crisis and its uneven brunt but also

the decades-long neglect of the American economy,

in particular our country’s infrastructure. Still, as this

reportdocuments,wedocooperateandcancertainly

find ways of working together more frequently and

effectively.

The restorationof confidence, trust, andbusi-

ness certainty—a precondition to our recovery and

reinvestment—dependsuponpublicagenciesinstilling

ateamethosamongtoday’scombatants,whichcannot

beaccomplishedbycallingtheshotsfromthesidelines.

For our public officials to work together productively

across party lines and alongside members of the pri-

vatesectorand thenonprofitworld,our federalagen-

cies must re-envision themselves as player-coaches,

withaclearstakeintheoutcomeofthegameandan

activepositionontheteam.Thegovernment’srolecan-

notbesimplyprovidingasubsidytoaprivatefirm.In

aneraofoutcryagainstgovernmentspending,federal

agenciesmustidentifyandcultivatewaysofcatalyzing

criticalprojectswithout relyingsolelyonthepowerof

thepublicpurse.

In many ways, the challenge we face today

resembles the one America faced in the latter half

of the 1930s, when the country risked a double-dip

“Whereas politicians across political

parties have focused on an ethos of

shared sacrifice to support deficit

reduction, partnerships tug upon a

different public value—the social

compact of working together as a team

toward a shared victory.”

19

depression.havingusedpublicfundstoclawourway

outofadeepfinancialcrisis,weturnedtorepairingour

publicbalancesheet.Whentheeconomyfalteredagain,

marrinereccles, thechairmanof theFederalReserve,

worriedthatourmountingdebtsandrealneedforpub-

licinvestmentwouldbehamperedbyaprevalentsen-

timent that “unwise spending seems to be spending

for the other fellow.”22 To keep the economy moving,

eccles,PresidentRoosevelt, and thesecretaryof the

treasury, henry morgenthau Jr., advocated for public-

private partnerships, quasi-public agencies, and self-

liquidating projects. The Tennessee valley Authority

wasonesuchinitiative,whichRooseveltdescribedas

a “corporationclothedwith thepowerofgovernment

butpossessedoftheflexibilityandinitiativeofaprivate

enterprise.”23

America’scurrentdebtcrisiswillnotdisappear

overnight.Wemustfindwaystocontinuetodeleverour

public balance sheet while also making infrastructure

investmentsthatwillenableanddriveeconomicgrowth.

Public-privatepartnershipsareanopportunitytomove

our country forward with the least possible outlay of

public funds. Whereas politicians across political par-

tieshavefocusedonanethosofsharedsacrificetosup-

portdeficitreduction,partnershipstuguponadifferent

public value—the social compact of working together

asateamtowardasharedvictory.ourexperiencewith

successful public-private partnerships gives us cause

forhope—andagameplanforwinningthefuture.

20

eNDNoTeS

1. DianaFarrelletal.,TheNewPowerBrokers:How

Oil, Asia, Hedge Funds, and Private Equity Are

ShapingGlobalMarkets(SanFrancisco:mckinsey

global Institute, october 2007), http://www.mck-

insey.com/mgi/publications/The_New_Power_

Brokers/index.asp.

2. Barack obama, “Remarks by the President dur-

ingmeetingofthePresident’seconomicRecovery

Advisory Board” (White house, Washington, Dc,

November 2, 2009), White house, office of the

Press Secretary, http://www.whitehouse.gov/files/

documents/PeRAB_meeting_11%202%2009_

Transcript.pdf.

3. exec.orderNo.13563,73Fed.Reg.3821(Jan.21,

2011),http://www.gpo.gov/fdsys/pkg/FR-2011-01-

21/pdf/2011-1385.pdf.

4. Barackobama,“Towarda21st-centuryRegulatory

System,” Wall Street Journal, January 18, 2011,

http://online.wsj.com/article/SB100014240527487

03396604576088272112103698.html.

5. Barack obama, “Remarks by the President in a

Town hall Discussion on energy in Fairless hills,

Pennsylvania” (gamesa Technology corporation,

Fairlesshills,PA,April6,2011),Whitehouse,office

of the Press Secretary, http://www.whitehouse.

gov/the-press-off ice/2011/04/06/remarks-

president-town-hall-discussion-energy-fairless-

hills-pennsylvani.

6. SeeBillRussell,RedandMe:MyCoach,MyLifelong

Friend, with Alan Steinberg (New york: harper

collins, 2009); and Russell Rules: 11 Lessons on

Leadership from the Twentieth Century’s Greatest

Winner,withAlanhilburgandDavidFalkner (New

york:Penguin,2001).

7. Warrene.Buffet,“TotheShareholdersofBerkshire

hathaway Inc.” (letters, February 26, 2011, and

February26,2010),http://www.berkshirehathaway.

com/letters/letters.html.

8. RonaldReagan,“RemarksattheAnnualmeetingof

theNationalAllianceofBusiness”(Sheratonhotel,

Washington,Dc,october5,1981),PublicPapers

ofRonaldReagan, http://www.reagan.utexas.edu/

archives/speeches/1981/100581a.htm.

9. office of the governor, Sarah Palin, “governor

Announces Public/Private gasline venture To

Pursue In-State gasline for Alaskans,” news

release,July7,2008.

10.officeofSenatororrinhatch,“hatchlaudsSenate

Passage of historic Serve America Act,” news

release, march 26, 2009, http://hatch.senate.gov/

public/index.cfm/2009/3/hatch-lauds-senate-

passage-of-historic-serve-america-act.

11. John hickenlooper, “Transportation,” Issues,

hickenlooper for colorado 2010 website,

ht tp: / /www.hickenlooperforcolorado.com/

issues?id=0014.

12.AmericansforProsperity,“AmericansforProsperity

ApplaudsRejectionofkaineTaxhike—condemns

Proposed gas Tax hike,” news release, June 27,

2008, http://www.americansforprosperity.org/afp-

applauds-rejection-kaine-tax-hike.

13. “koch maps Privatized Road Plan,” Tulsa World,

August25,1999.

14.careygillam,“u.S.ethanolInvestmentsSlow,Face

uncertainty,”Reuters,February22,2011;andmarty

graham,“BioenergycropcompanyPlantsItsFlag

in India,” San Diego Business Journal, march 28,

2011.

15.marketResearch.com, Koch Industries, Inc.

AnalysisAcrosstheOilandGasValueChainReport

(Rockville, mD: marketResearch.com, December

30,2010).

16.Phillip A. Sharp et al., The Third Revolution:

The Convergence of the Life Sciences, Physical

21

Sciences, and Engineering (Washington, Dc:

massachusetts Institute of Technology, 2011),

http://web.mit.edu/dc/Policy/mIT%20White%20

Paper%20on%20convergence.pdf.

17.ourresearchbuildsonpriorworkbymichaellikosky,

oneoftheauthorsofthisreport.See,forexample,

michael B. likosky, Obama’s Bank: Financing a

DurableNewDeal(cambridge:cambridgeuniversity

Press,2010);Law,Infrastructure,andHumanRights

(cambridge: cambridge university Press, 2006);

The Silicon Empire: Law, Culture and Commerce

(Aldershot,uk:Ashgate,2005);and“civilSociety

Strategies and Public-Private-Partnerships” (com-

missioned report,FordFoundation,2007);aswell

asmichaelB.likosky,ed.,PrivitisingDevelopment:

TransnationalLaw,InfrastructureandHumanRights

(leiden:martinusNijhoff,2005);andTransnational

Legal Processees: Globalisation and Power

Disparities (cambridge: cambridge university

Press, 2002). See also uN conference on Trade

andDevelopment,WorldInvestmentReport2007:

Transnational Corporations, Extractive Industries

andDevelopment (geneva:unitedNations,2007),

www.unctad.org/en/docs/wir2007_en.pdf; and

World Investment Report 2008: Transnational

Corporations, and the Infrastructure Challenge

(geneva:unitedNations,2008),http://www.unctad.

org/templates/WebFlyer.asp?intItemID=4629.

18.Barackobama,“RemarksbythePresidentandthe

vicePresident to theu.S.conferenceofmayors”

(Whitehouse,January21,2010),Whitehouse,office

of the Press Secretary, http://www.whitehouse.

gov/the-press-office/remarks-president-and-vice-

president-us-conference-mayors.

19.White house, office of the Press Secretary,

“President obama Announces more key

AdministrationPosts,”newsrelease,July8,2010,

http://www.whitehouse.gov/the-press-office/

p re s i d e n t - o b a m a - a n n o u n c e s - m o re - k e y -

administration-posts-7810.

20.BuildingandupgradingInfrastructureforlong-Term

Development (BuIlD Act), S. 652, 112th cong.,

http://www.opencongress.org/bill/112-s652/

show.(2011).

21.michael B. likosky, Obama’s Bank: Financing

a Durable New Deal (cambridge: cambridge

universityPress,2010).

22.marriner S. eccles, Economic Balance and a

BalancedBudget(Newyork:harperandBrothers,

1940),261.

23.Quoted inWolfgangg.Friedmann,TheStateand

the Rule of Law in a Mixed Economy (london:

StevensandSons,1971),56.

22

ABouTTheceNTeRoNlAW&PuBlIcFINANce

cohesive infrastructure and energy policy is essential

forensuring thatAmerica invests inwhat isneeded to

promote competitiveness, resiliency, and broad-based

opportunity. however, decision-making responsibilities

arefragmentedacrossthefederalgovernmentandalso

thestatesandlocalities,ofteninsector-basedsilos,and

many of our most innovative financing ideas and pro-

grams are rarely discussed in a holistic way. This bal-

kanizationimpedesourabilitytoengageinthetypesof

coordinatedplanningessentialforsound,forward-look-

ing investmentdecisions.Thecenteronlaw&Public

Finance assesses policy programs, financing devices,

contractualarrangements,specificprojects,andindustry

trends. Italsoprovidescapacity-buildingtopublicoffi-

cialsandotherkeystakeholders,primarilyoninnovative

financing mechanisms and contractual arrangements.

A center of the Social Science Research council, it is

supportedby theFordFoundationand theRockefeller

Foundation.

TogetherwithNewyorkuniversity’sInstitutefor

Publicknowledge,thecenteronlaw&PublicFinance

convenestheReinvestinginAmericaInitiative,apublic-

education initiative bringing together key stakeholders

to forgeworkablesolutionstopressingchallengestied

tothefinancingofeconomicrecoveryandreinvestment.

Participants to date have included representatives of

Aecom; BlS Investments; the Brookings Institution;

BuildingAmerica’sFuture;thecaliforniaStateTreasurer’s

office; the State of california Business, Transportation

and housing Agency; the california Infrastructure

and economic Development Bank; the carlyle group;

the center for State Innovation; the citizens Budget

commission; citi Infrastructure Investors; columbia

universitylawSchool;ernst&young;kPmg;lazard;

meridiam;moody’s;morganStanley; theStateofNew

Jersey Schools Development Authority; the New york

State commission on State Asset maximization; the

NewyorkStateempireStateDevelopmentcorporation;

Nossaman;theorganisationforeconomicco-operation

andDevelopment;orrick;thePartnershipforNewyork

city; the Regional Plan Association; SeIu; Standard

& Poor’s; the university of Southern california; the

uS Department of commerce; the uS Department

of Defense; the uS congress; the uS Department of

Transportation;theuSDepartmentoftheTreasury;the

uSPublicInterestResearchgroup;andyalelawSchool.

ABouTTheAuThoRS

Michael Likosky is senior fellow at Nyu’s Institute

for Public knowledge and also directs the center on

law&PublicFinanceat theSocialScienceResearch

council. he was previously professor of international

economiclawattheuniversityoflondonandhasheld

visitingpostsandfellowshipsatoxfordlaw,Nyulaw,

theuniversityofBonn,Fordhamlaw,anduniversityof

Wisconsinlaw.mr.likoskyspecializesintheareasof

foreign direct investment, public-private partnerships,

and economic-growth strategies, with international

expertise inanumberofsectors, includinghightech-

nology, infrastructure, cleanenergy, oil andgas,met-

als and minerals, broadcasting, and manufacturing.

he is the lead international legal expert in infrastruc-

ture,energy,andextractivespartnershipstotheunited

Nations conference on Trade and Development and

itsannualWorldInvestmentReport,alsoservesasan

experttotheoecDandtheAcadémieInternationalede

Droitcomparé,andco-directsgovernorJerryBrown’s

taskforcetomodernizethecaliforniaInfrastructureand

economicDevelopmentBank.

mr. likosky advises members of congress;

the uS Treasury; the State of california Business,

23

Transportation and housing Agency; the california

Infrastructure and economic Development Bank; the

NewyorkStateempireStateDevelopmentcorporation;

leadinginvestmentfirms,includingD.e.Shaw,Barclays,

credit Suisse, Deutsche Bank, goldman Sachs,

morgan Stanley, and Prudential; international organi-

zations, including IDlo; major corporations, includ-

ing ABc, cBS, Deloitte, eSPN, and NBc; nonprofits,

includingAmnesty International, theFordFoundation,

TransparencyInternational,andcDRFglobal;andlabor

unions, including the laborers’ International union of

North America, the Service employees International

union, and the Trades union conference. his work

has been supported by a range of funders, including

the Ford Foundation, the Rockefeller Foundation, the

markleFoundation,theArtsandhumanitiesResearch

council, and the Institute for a New Reflection on

governance.

mr. likosky has been a featured speaker on

international infrastructure, energy, and economic-

growthstrategies togroupssuchas theuSchamber

ofcommerce,ProjectFinance International, theBond

Buyer, the International Project Finance Association,

InfrastructureInvestor,oxforduniversity,themacmillan

centeratyaleuniversity,WorldFreeZoneconvention,

andtheAmericanSocietyofcivilengineers.heisablog-

gerat theHuffingtonPost,andhisworkalsoappears

throughoutletssuchas theNewYorkTimes, theWall

Street Journal, Marketplace radio, the Bond Buyer,

BNA,AmericanBanker,theGuardian(uk),andtheLos

AngelesTimes.heisaregularcontributortotheinterna-

tionallectureseriestheoxfordAmnestylectures.

mr.likosky’smostrecentbook,Obama’sBank:

Financing a Durable New Deal (cambridge university

Press,2010),describestheobamaadministration’spub-

lic-private-partnership–basedapproachtoinfrastructure

and clean-energy investment and offers lessons for it

based on thirty years of international experience with

partnership projects. his previous books include Law,

Infrastructure,andHumanRights(cambridgeuniversity

Press, 2007); Privatising Development (martinus

Nijhoff,2005);TheSiliconEmpire(Ashgate,2005);and

Transnational Legal Processes (cambridge university

Press,2002).heholdsadoctoratefromtheuniversity

ofoxfordFacultyoflaw.

Josh Ishimatsu, senior fellow at the center on law

&PublicFinance, isalsoprincipalofmzconsulting,a

consultingfirmspecializingincommunitydevelopment.

he has over fifteen years experience in nonprofit real

estate and community development, including more

thanelevenyearsatthelittleTokyoServicecenter,a

neighborhood-based community development corpo-

ration, where, most recently, he served as real estate

developmentdirector.hehasbeenresponsibleforover

twenty realestatedevelopmentprojects, totalingover

$100 million in successful project fundraising, more

than 600 units of affordable housing, and more than

100,000squarefeetofnonprofitcommercialspace.

mr.Ishimatsuhasalsoworkedasanorganizer

atafair-housingadvocacyorganizationandasageo-

hydrologist at an environmental consulting company.

he has an mA in urban planning and a JD from the

universityofcalifornia,losAngeles.

Joyce L. Miller issenior fellowat thecenteronlaw

& Public Finance, a board member of the New york

StateempireStateDevelopmentcorporation,andthe

founderandceoofTieronePublicStrategies,acon-

sultingfirmthatprovidesin-depthpublicpolicyanalysis

in the areas of infrastructure finance, real estate, and

energypolicy.ANewyorknative,sheisalsoatrustee

ofthecitizensBudgetcommissionandservesonthe

boardofthecommunityServiceSociety.

For more than three decades, ms. miller has

workedinvariousfieldsofgovernment,business,and

24

finance,includingtheofficesoftheNewyorkStateand

Newyorkcitycomptrollers.Whilewiththecitycomp-

troller’soffice, sheservedaschiefof staff to thefirst

deputycomptroller/chieffinancialofficer,whooversaw

thecapitalmarketsactivitiesofthecomptroller’soffice,

includingmanagementof theassetsof theNewyork

cityRetirementSystems,establishedthemulti-billion-

dollar real estate investment program, and served as

realestateinvestmentdirector,investingover$2.5bil-

lion. ms. miller received her BA from city college of

Newyork,hermBAfromNewyorkuniversity,andher

mPhilfromcolumbiauniversity.

A Report of the Center on Law & Public Finance, Social Science Research Council

Made possible by the generous support of the Ford Foundation

The Social Science Research CouncilOne Pierrepont PlazaBrooklyn, NY 11201www.ssrc.org