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A public–private partnership (PPP, 3P, or P3) is a long-term arrangement between a government and private sector institutions. [1] [2] Typically, it involves private capital financing government projects and services up-front, and then drawing revenues from taxpayers and/or users for profit over the course of the PPP contract. [3]
Government spending or expenditure includes all government consumption, investment, and transfer payments. [1] [2] In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or collective needs of the community, is classed as government final consumption expenditure.
In a situation of deflation, real interest rates may be high, inhibiting investment. Using targeted public spending to create inflationary pressure, real interest rates may be reduced, stimulating private sector investment. Government spending may also induce private sector investment via the multiplier effect. This is the ratio of change in ...
The term "private sector involvement" was introduced in the late-1990s in the context of the discussions on bond restructurings and capital account crises. [1]: 6 Previously, the term used to broadly denote any kind of private-sector participation into an existing government program, such as, for example, family planning, [2] or health care. [3]
While interest rates for private companies are often higher than for government debt, this can serve as a useful constraint to promote efficient investments by private companies, instead of cross-subsidizing them with the overall credit-risk of the country. Investment decisions are then governed by market interest rates.
Public–private partnerships (PPP or P3) are cooperative arrangements between two or more public and private sectors, typically of a long-term nature. [1] In the United States , they mostly took the form of toll roads concessions , community post offices and urban renewal projects. [ 2 ]
(Y − T + TR) is disposable income whereas (Y − T + TR − C) is private saving. Public saving, also known as the budget surplus, is the term (T − G − TR), which is government revenue through taxes, minus government expenditures on goods and services, minus transfers. Thus we have that private plus public saving equals investment.
PPIP uses a combination of private equity and Government equity and debt through TARP to facilitate purchases of legacy mortgage-backed securities ("MBS") held by financial institutions. In July 2009, Treasury announced the selection of nine Public–Private Investment Fund ("PPIF") managers.