Is U.S. Infrastructure More Expensive?

The most recent U.S. Infrastructure Report Card (brought to you by the American Society of Civil Engineers) rates America’s infrastructure a D+, and estimates that $3.6 trillion will need to be invested by 2020 in order to keep our roads and bridges (and sewer pipes and subway lines and power plants and retaining walls and fire stations and so on) from crumbling. 

Odds are, the money isn’t coming. Voters can be schizophrenic about infrastructure - they demand higher quality but frequently vote against bills to fund maintenance and construction. In the current anti-tax environment, even critical spending on bridges can be a heavy political lift.

One reasonable response by engineers and planners would be to try to do less with more – focus on critical issues and keep designs and materials as simple as possible to bring down costs. In fact, the opposite may be happening. U.S. infrastructure costs are almost certainly higher than those of other developed countries in some areas.

The evidence that we’re getting less bang for our buck is a bit spotty, but there are many sectoral analyses showing that U.S. infrastructure is more costly in specific areas, such as tunnels and trains. It’s likely that we pay more for bridges as well, and that per-unit maintenance expenditures are also higher (though most other developed countries spend a higher gross amount on maintenance than the U.S.). What’s lacking is a general assessment of infrastructure projects that relates quality and quantity to cost, compared to similar projects in other countries. What do different places pay for the same basket of amenities?

Much of the evidence for high U.S. costs is focused on public transportation spending. Some boondoggles like Boston’s $24 billion Big Dig have also received attention. In general, though, this field of study is in its infancy, particularly on the critical question of why we pay more.

Some possible areas of investigation include mismanagement of contractors, legislative and political interference, ostentatious architecture, onerous procurement rules (including, paradoxically, low-bid rules), time-consuming environmental reviews, prevailing-wage agreements, duplicated administrative functions, bans on certain types of revenue generation, strong rights for private property owners, aldermanic privilege, and political fragmentation.

Interestingly, none of the likely culprits are innate production factors - the high cost of land, the high cost of materials, and the high cost of labor. Land, materials, and labor are costly in the United States, but no more so than, say, Tokyo. And, as a 2011 Economist article helpfully pointed out, the $3.4 billion spent on the Calatrava-designed transit station at the World Trade Center would’ve paid for the entire Second Avenue subway line if we paid what Tokyo pays for a mile of subway tunnel.

Deeper analysis is needed to figure out why infrastructure costs are so high in the United States. But the direction of the work seems clear - faulty institutions are driving U.S. infrastructure off a cliff.

Title image courtesy of Chicago Transit Authority.