Let's say you strike a deal with a state to build a toll road. They agree, and you borrow a billion dollars, build the road, and start collecting tolls. It do

Let's say you strike a deal with a state to build a toll road. They agree, and you borrow a billion dollars, build the road, and start collecting tolls. It doesn't cost the tax payer anything, and the people who use it do so voluntarily. A few years later a politician decides it will be politically popular to build a free road right next to your road, but will simply pay for it with tax dollars. This is not exactly fair to you right? The politician has the power to take the money from constituants by threat of force (you go to jail for not paying taxes). You don't have this power. In foresight of this situation, you get the state to sign an agreement that they will not compete with your highway with taxpayer dollars. They are welcome to build another toll road, but it just can't be subsidized by the tax payer. So yes, there are cases where is makes sense for a government to prohibit itself from building a road.