Interstate compacts are agreements made between two or more states in the United States to address shared issues or manage resources. These legally binding contracts require approval from Congress and can cover various topics, such as water rights, transportation, and environmental protection. These compacts help states collaborate effectively, ensuring that they work together to solve problems that cross state lines. For example, the Port Authority of New York and New Jersey is an interstate compact that manages transportation and infrastructure in the region, demonstrating how states can cooperate for mutual benefit.