New book “Infrastructure Economics and Policy” offers an essential guide to smart public investment

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The book comes at a time when governments in many countries are looking to infrastructure as a policy tool to boost national economies that have been affected by the COVID-19 pandemic. The book offers case studies, data and analysis that can help governments evaluate infrastructure proposals.

It includes the following six elements to consider in any infrastructure investment program, based on extensive research into the ingredients for success:

Think long-term growth, not a quick recovery. Contrary to popular belief, investing in infrastructure is not an efficient way to stimulate the economy quickly. It takes many years to obtain the necessary permits and funding to begin construction on a new project, and the sophisticated equipment and training required by modern construction means that such projects do not offer job avenues. quickly for a large number of unskilled workers. Infrastructure economics and policy explains why infrastructure investments offer few short-term impacts, even when the long-term economic impacts are clearly positive.

Shovel-worthy questions, not shovel-ready. The impacts of infrastructure projects are highly dependent on their quality. Many infrastructure agencies are required to prepare cost-benefit analyzes of major projects or policies they are considering and relevant alternatives to those projects. However, few (if any) governments require agencies to adopt the alternative with the highest net benefit. This is often due to political considerations, including the fear that cost-benefit analysis does not adequately reflect the goals of justice and equity. Although cost-benefit analyzes are not perfect, they are one of the best tools available for evaluating infrastructure proposals, and agencies should be careful before deviating significantly from the option offering the benefit. net the highest for no good reason.

Beware of overconfidence and over-optimism. A historical analysis of some 2,000 infrastructure projects found that actual costs were significantly higher than expected, while utilization was significantly lower, such as Bent Flyvbjerg and Dirk W. Bester explore in a chapter of the book. The authors identify several well-known behavioral limitations that lead to these results, in particular overconfidence bias and optimism bias. Combating these biases is difficult because they are so deeply rooted in human nature, but the book outlines measures that can help, such as holding forecasters legally accountable or using independent audits.

Take fairness seriously. The costs and benefits of infrastructure projects are often inequitably distributed. For one thing, major infrastructure such as highways and power plants are often built in places where the negative impacts are disproportionately felt by low-income residents and people of color. On the other hand, the lack of access to basic infrastructure, especially in developing countries, undermines the quality of life and contributes to inequalities. Governments need to take both issues seriously and adopt complementary policies to address them.

Consider governance challenges. State and local governments have always been deeply involved in the regulation of private and public infrastructure due to important concerns such as access, location, and protection from monopolization. However, the advent of a major new infrastructure program, particularly one focused on decarbonizing the energy system to combat climate change, will strengthen the role of the national government. National governments are uniquely placed to invest in new technologies that require collective action and to mitigate the economic impact of climate change policies, for example by compensating owners of fossil fuel power plants and other assets which lose their value. These governance challenges and others related to infrastructure may prove even more difficult than the financial challenges on which current debates focus.

Investing for the future and responding to radical uncertainties. In the face of radical uncertainties, including climate change, the pandemic, automation and the emergence of the sharing economy, governments must not only fix deteriorating infrastructure, but also invest in a new generation of infrastructure. climate-resistant and taking advantage of new technologies. This transformation will require overcoming significant institutional hurdles, assessing the pros and cons of new technologies, and putting in place an effective change management process.

Sustainably built infrastructure is essential for resilient, equitable and livable communities and regions around the world. Through in-depth analysis, Infrastructure economics and policy challenges conventional wisdom on many issues, from the most effective levels of congestion charges on roads to inner cities to the belief that privatization dramatically affects infrastructure performance. With chapters covering land value capture and other financing mechanisms; the role of infrastructure in urban form, economic performance and quality of life, especially for disinvested communities; and other essential concepts, this new book offers evidence-based and policy-based solutions for officials in government agencies and private companies who oversee infrastructure services, for students, and for business-oriented lay readers. policies.

For more information or to order a copy of Infrastructure economics and policyvisit https://www.lincolninst.edu/publications/books/infrastructure-economics-policy.

Praise for Infrastructure economics and policy

“This informative and timely book offers a rich array of information: comparisons between sectors and countries, the link between policy ideas and their implementation, and the evaluation of notable experiences.”
Weing Wu, Director of the MS Urban Planning Program, Columbia University

“The content is highly relevant at this time. As countries around the world design economic recovery and recovery programs from the COVID-19 pandemic, the issue of infrastructure has returned – once again – to the forefront of discussions. policy discussions. The analysis and policy recommendations and lessons will be invaluable to developed and developing countries alike.”
Ede Ijjasz-VasquezFormer Regional Director of Sustainable Development, Africaworld Bank

“A marvelous collection of essays by many of the leading thinkers of our time on infrastructure investment, innovation and regulation. At once authoritative, balanced, up-to-date, global in scope and packed with fascinating details, it will, I am sure, be the standard work in this field for years to come.”
Alan AltshulerRuth and Frank Stanton Emeritus Professor of Urban Policy and Planning, Harvard Kennedy School

“As the United States debates reinvestment in aging infrastructure, China and other countries are embarking on next-generation domestic and international infrastructure projects, and as climate change reminds us that we are designing sustainable infrastructure systems for an uncertain future, not the past, there is no There is no better resource for scholars and practitioners than this timely volume. Leading figures in infrastructure policy address challenges ranging from measuring the economic impacts of major public works in the 20th century to integrating today’s emerging and decentralized transportation and energy technologies, all under a large and fascinating tent.”
Sheila Olmsteadpublic affairs professor, Lyndon B. Johnson School public affairs, the University of Texas at Austin

“Infrastructure seems to be on everyone’s mind – in United States, Chinaand around the world. Billions of dollars here, billions there. But what do we really know? The international focus helps unravel issues of economic impact, equity, financing, and innovation in a way that generates important insights. This book is an intellectual assortment. He has something for everyone.”
Daniel SperlingFounding Director, Institute of Transportation Studies, University of California, Davis; Blue Planet Prize Emeritus Professor of Engineering and Environmental Science and Policy

“The Lincoln Institute Infrastructure economics and policy talks about the unique opportunity our nation currently faces to invest in impactful, innovative, equitable and sustainable infrastructure. For those of us who are practitioners in the field, the book offers a thought-provoking and insightful analysis of infrastructure policy and practice and the challenges and opportunities that governments face when making major investments in infrastructure. infrastructure.”
Polly Trottenberg, Transportation practitioner and policy expert, former New York City Transportation Commissioner

About the editors
José A. Gómez-Ibáñez is the Derek C. Bok Professor Emeritus of Urban Planning and Public Policy at Harvard University. Zhi Liu is Director of the China Program at the Lincoln Institute of Land Policy.

About the Lincoln Institute of Land Policy
The Lincoln Institute of Land Policy seeks to improve the quality of life through effective land use, taxation, and management. A private, not-for-profit operating foundation whose origins date back to 1946, the Lincoln Institute researches and advocates creative approaches to the earth as a solution to economic, social and environmental challenges. Through education, training, publications and events, we integrate theory and practice to inform public policy decisions around the world.

SOURCE Lincoln Institute of Land Policy

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