Australia has long been an importer of second-hand American ideas, many of them well past their use-by date on the home market. So it’s interesting to see the trade flowing in the other direction for once.

As the Trump administration tries to find a way to finance its promised infrastructure investments without spending public money, it has looked to Australian experiments in innovative public financing, generally referred to as public private partnerships (PPPs). The most recent version, going under the name “asset recycling”, involved selling off public assets and using the proceeds to finance new investments.

Viewed from the other side of the planet, asset recycling may look new and exciting. In reality, however, it was the last gasp of a failed model. The government’s asset recycling fund, established in 2014, was shut down in 2016, with barely half of its budget allocation spent.

The core problem with the “recycling” idea is that income-generating assets were sold to finance new investments that did not generate income. Rather like selling your house to buy an expensive car, this is a trick that can only be done once, and leaves governments with increased net debt.

This end of asset recycling has been part of a broader reaction against privatisation and PPPs, a reaction which has swept a number of state governments from office. After decades of trying to reduce public debt through these measures, Australian governments have finally realised that the best way to get a job done is to do it yourself.

This was brought home in the recent federal budget. The budget included more than US$6bn for a 1200-mile inland rail freight line, funded almost entirely by borrowing (a short section including five miles of tunnel at the end of the line is to be funded by a PPP).

In the leadup to the budget, Treasurer Scott Morrison (re)discovered the distinction between “good” debt, used to finance investment and “bad” debt, used to finance current expenditure.

This is just one of many examples. Following a series of blackouts in its privatised electricity grid, the South Australian Labor state government announced that it would build its own gas-fired power plant.

The federal government initially attacked the move, but then decided to emulate it, announcing a massive expansion of the publicly owned Snowy hydro-electric scheme.

The roots of the failure go back to the 1980s and 1990s. Desperate to avoid borrowing, but still keen to build new infrastructure, governments used all manner of expedients to induce private firms to do the job. The resulting deals, unsurprisingly, were highly profitable to private investors. It was in this period that Macquarie Bank, a leading participant in PPP deals and owner of privatised monopolies, became known as the “millionaires’ factory”.

Over time, however, governments looked harder for value-for-money and were more reluctant to bail out failed private infrastructure investments. Investors on the other hand, having seen the high returns from the early deals, were eager to bid for more, even if that meant making overly optimistic assumptions about variables like the traffic flows on toll roads.

This time around, it was the investors who lost out in projects notably including tunnel projects in Sydney and Brisbane.

The peak of absurdity was reached with the Airport Link tunnel project in Brisbane. Shares in the project were sold on a “part paid” basis, meaning that the shareholders were obliged to make further payments. When it became clear that the project was a flop, the value of the shares fell to a fraction of a cent. Some naïve investors bought large numbers, not realising that they were incurring huge obligations. More cannily, a greenmailer bought enough shares to obtain majority control, threatening to shut the whole project down unless he was bought out. The tunnel’s underwriters, Macquarie Bank, facing the risk of heavy losses, duly obliged.

A series of disasters of this kind, and the diminished appetite for risk following the global financial crisis, killed off the traditional PPP model in Australia. Only a handful of such contracts, where private investors take risks commensurate with their returns, have been let in recent years. There have been a variety of attempts to keep the idea going, such as availability payments and supported debt. The common thread is that, unlike the traditional model, financing relies on hidden government borrowing or guarantees.

After many attempts to develop a workable light bulb, Thomas Edison is supposed to have said, “I haven’t failed. I’ve just found 10,000 things that won’t work”. Australian governments had a similar experience in trying to finance public infrastructure without going into debt.

Edison found a light bulb in the end. Australia may not have found its light bulb, but it has provided the world with a lot of experience on what doesn’t work.