The Efficacy of Private Special Purpose Entities and Public Authorities
There has been much written about the growth and fiscal underpinnings of public authorities and public benefit corporations. An important addition to the literature is an article authored this month by Steven Schwarcz of Duke School of Law, The Use and Abuse of Special-Purpose Entities in Public Finance. Focusing on their structure, strength, and failings, Steve concludes that greater regulatory oversight of SPEs and public authorities to improve governance, control debt, and increase transparency would be worthwhile. Noting that New York State, through enactment of the Debt Reform Act of 2000 and Public Authorities Reform Act of 2009, has achieved a number of these goals, Steve provides a model regulatory approach which he believes other states could use. It is a well written and thoughtful piece and just a bit provocative.