Asset recycling in the context of a national P3 investment strategy follows an international trend largely considered to be a success, and would theoretically be a good concept for the U.S., but it runs into the fundamental American barrier of fragmentation and deeply localized governance, varying by degree across sectors and jurisdictional levels. While asset recycling would theoretically raise a large amount of capital without impairing the national debt, and could create the opportunity to reinvest this capital in our nation’s infrastructure, three primary areas of challenge for asset recycling exist:
First, as stated above, the vast majority of the nation’s infrastructure is owned and managed at the local level–80% according to a 2016 Aspen Institute/Duke Nicholas Institute report. For the federal government to lead any effort identifying assets for recycling would be a highly charged endeavor requiring resolution of state and local governance and decision-making across the U.S. The diverse and decentralized nature of U.S. infrastructure assets and their governance has proven to be very challenging in the implementation of P3 in the past.
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