We analyse the Public Private Partnerships (PPPs) in order to account for their uneven distribution among the European Union countries and to identify the motivations of the public actor in selecting PPPs. We focus on the fiscal incentives to overcome budget and borrowing constraints, taking into account the political features and institutional frameworks of the countries.
Some dangerous short- and long-termambiguities of fiscal policies arise from
the belief that Laffer effects may be generated from deficit-financed tax cuts able to
stimulate aggregate demand. However, even in a supply-side framework, fiscal illusion
prevents a rational perception of the effectiveness of Laffer-oriented fiscal measures.
The ambiguity of the Laffer effect led to an important series of studies of Francesco
Forte, designed to disclose and empirically test its interactions with short- and long-term
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