Public-Private Partnerships or Just Crony Capitalism?
Published September 19, 2012 at Rock River Times
“Public-private partnership” has become the latest buzzword among the political class and its supporters. Often used in combination with “economic development” (another favorite campaign slogan), it conjures the rosy image of government and the private sector walking hand-in-hand toward a more prosperous future. More careful observers, however, see nothing more than a mask for cronyism and corruption. In truth, these partnerships may enrich a few, but they hardly ever yield the promised benefits for the public.
The “public-private” concept works in several ways: either government partners with private business to build and maintain public projects, or government invests in private business in order to foster the growth of certain industries, supposedly for the public good. Rather than stay out of the marketplace, government officials use their influence and authority to grant special favors to their friends and colleagues in the business world.
When government officials and business leaders maintain a close relationship for their own financial benefit, as is often the case with public-private partnerships, it is sometimes called “crony capitalism.” Crony capitalism is marked by favoritism when it comes to handing out legal permits, government grants, business contracts, and special tax breaks. Self-serving friendships or familial ties between businessmen and government officials mean that anyone not on the “inside” of these relationships is excluded from the process.