Have the infrastructure bill tell us the cost of each bridge, road and train
Congress and the White House may soon finally agree on an infrastructure bill. If the federal government does decide to spend almost a tenth of the country’s gross domestic product on infrastructure, the public should have one small request: tell us the costs.
To the surprise of many – including ourselves – there is a broad consensus that it costs much more to build infrastructure in the free market of the United States compared to a Europe saturated with unions and regulations. Anecdotal evidence shows that the cost of infrastructure in the United States is high and rising. The Second Avenue subway in New York City is infamous for its astronomical costs of $ 2.25 billion per mile. But more mundane examples are easy to find. For example, the first stop of I-696 from Detroit cost $ 13 million per mile (in 2016 dollars) to build in 1964; the last stage in 1989 cost more than six times as much per mile.
Our research reveals that the Detroit model is not atypical. In real dollars, it cost about three times as much to build a kilometer of freeway in the 1980s than in the 1960s. Related work by others finds that these increases continued relatively unabated until today. days.
The debate on the potential causes of these high and rising costs is ongoing. These are unlikely to be material prices, and unlikely to be unit labor costs, as both have changed little since the 1960s. We believe the rise of the ‘citizen voice’ – a combination of changes in laws, judicial doctrine and social movements that give citizens a greater contribution to the decision-making process – has both democratized decision-making and increased costs.
Whatever the cause, it’s hard to come up with a plan to control costs when we don’t know what they really are. The cost issue is probably not limited to interstate highways.
States know – and make public – initial bids on infrastructure projects. However, states rarely disclose the final cost of projects. This is essential, as it is the discrepancy between the initial accepted offer and the final total cost that can lead to a substantial increase in costs. Thus, any new infrastructure bill should require beneficiaries to disclose the interim total costs during the project, as well as the final total cost of the project. These disclosures should be posted on a publicly accessible website.
Public scrutiny can change behavior, but we can’t look at costs that we don’t know.
In the long run, less money spent on a given infrastructure means the more efficiently we can spend on things like removing lead from water and limiting sewage spills, and the less debt we create for future generations.
Some might argue that cost reporting is another onerous regulation that paradoxically serves to increase infrastructure costs. We suspect the opposite: when governments are required to make costs public, both government and external actors will increase control over those costs. This sunlight on a long dark corner of public spending will far exceed the regulatory burden.
Leah Brooks is Associate Professor of Public Policy and Public Affairs at George Washington University.
Zachary Liscow is an economist and associate professor at Yale Law School who served on the staff of the White House Council of Economic Advisors.