America's Sky-High Infrastructure Costs

Moneybox
A blog about business and economics.
Aug. 27 2012 2:57 PM

America's Sky-High Infrastructure Costs

One of the real enduring puzzles of American public policy is why our infrastructure costs are so high by international standards. A very useful Stephen Smith column on Bloomberg.com details some of the reasons, which mostly seem to come down to very poor project management. But read him for the details.

My hazy generalization is that a lot of local government in the United States seems to me to reflect a misguided overemphasis on procedural barriers to corruption to the exclusion of relying on democratic accountability. You could imagine a policy framework in which mayors were supposed to finance infrastructure projects entirely out of slush funds. If you wanted to take your entire slush fund and give it to a company owned by your wife's brother in one giant contract, then you'd be free to do so. The problem is that your opponent at the next campaign might say, "Hey, let's elect a mayor who doesn't blow the whole infrastructure fund on a sweetheart contract for his brother-in-law." The same kind of system that would give the mayor flexibility to be corrupt would also give him the flexibility to try to manage projects more intelligently.

Advertisement

Obviously the slush-fund model is going to have some problems, and we probably shouldn't leap all the way in that direction. But as Smith argues, to a surprising extent, lowest-price bidding rules fail to achieve the goal of low prices. They leave you wide open to getting screwed over, which means your proposals need to be extremely detailed to avoid getting screwed over. Extremely detailed proposals make it difficult for new entrants to bid for contracts and also mean that you need to hire a lot of consultants to write the proposal in the first place. Next thing you know, the whole thing becomes an incestuous circle of "consultants who consultant with consultants and advisers who advise advisers" to put the thing together.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

The Right to Run

If you can vote, you should be able to run for public office—any office.

Move Aside, Oxford Comma, the New Battle Is Over Single or Double Quotes

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Ben Bradlee’s Fascinating Relationship With JFK

Culturebox

The Simpsons World App Is Finally Here

I feel like a kid in some kind of store.

Technology

Driving in Circles

The autonomous Google car may never actually happen.

My Father Invented Social Networking at a Girls’ Reform School in the 1930s

How Punctual Are Germans?

  News & Politics
The World
Oct. 22 2014 11:57 AM Why Wasn't the WHO Ready for Ebola?
  Business
Moneybox
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
  Life
Atlas Obscura
Oct. 22 2014 12:03 PM Colonia Fara: An Italian Summer Camp for Happy Little Fascists
  Double X
The XX Factor
Oct. 22 2014 10:00 AM On the Internet, Men Are Called Names. Women Are Stalked and Sexually Harassed.
  Slate Plus
Working
Oct. 22 2014 6:00 AM Why It’s OK to Ask People What They Do David Plotz talks to two junior staffers about the lessons of Working.
  Arts
Behold
Oct. 22 2014 11:04 AM Do All U.S. Presidents Look the Same? What About Japan’s Prime Ministers?
  Technology
Technology
Oct. 22 2014 10:29 AM Apple TV Could Still Work Here’s how Apple can fix its living-room product.
  Health & Science
Science
Oct. 22 2014 11:30 AM Where Does Ebola Hide? My nerve-wracking research with shrieking bats.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.