Narrator: Listen to part of a lecture in a United States Government class.
Professor: We've been talking about the basic services and facilities that an economy needs to function: roads, bridges, rail systems, water supplies, power grids, and so forth, what we call infrastructure.
Now, traditionally much of a society's infrastructure, particularly the transportation infrastructure, has been owned and operated by states, by governments.
But lately, local and state governments have started to consider and sometimes actually enter into various deals to privatize parts of their infrastructure, particularly in the transportation sector.
And why is this privatization happening?
Well, as you may know, in the 1950s and 60s there was a tremendous highway building boom.
Governments created a huge interlocking network of highways with associated bridges and tunnels.
But these facilities are getting old now and they're becoming more and more expensive to maintain, very expensive actually.
Tolls and tax revenues don't often cover all the needed repairs.
Student: So why don't the governments just raise tolls and taxes?
Professor: Well, that's not so simple.
Government officials are elected by voters and voters get upset when their taxes go up.
And as for highways tolls, commuters especially don't like paying higher tolls, merely proposing increases can damage political careers.
So there's tremendous pressure on governments to find other ways to maintain infrastructure assets.
One solution is to sell or lease a part of the infrastructure, a toll bridge, a tunnel, something like that to a private company, usually a company that specializes in this sort of thing.
The idea is that the company that buys or leases a bridge or a highway or whatever will find it easier to keep it in good repair.
Student: That will make commuters happy.
Professor: Right, there could be better service.
Since they are not government entities, private companies face less political resistance, say to raising tolls in order to provide that better service.
But besides that, there's another reason governments like these deals.
States often have trouble paying their bills and they can use money they get from selling or leasing a piece of infrastructure to balance their budgets.
Student: That all sounds good to me.