Why Does American Infrastructure Cost More and Take Longer To Build Than It Used To?
In time-lapse videos from 2016 that are making the rounds again, Dutch crews can be seen building an entire highway overpass over a single weekend. That has stirred discussion of a longstanding question: Why is construction of public infrastructure slow and expensive in the United States compared with other advanced countries? New York City subways offer one famous example: The Second Avenue line now being partially constructed nearly 100 years after being proposed costs six times as much as a comparable project in Paris.
In a 2019 paper, Leah Brooks of George Washington University and Zachary D. Liscow of Yale University sought to explain a striking fact: “Real spending per mile on Interstate construction increased more than three-fold from the 1960s to the 1980s.”
Two explanations frequently offered for this rise are plausible on the surface, but turn out to lack explanatory power. The first is that states built the easier sections of the interstate highway system first, and left for later the more difficult and expensive portions. It seems, however, the later-finished sections do not score worse on a scale of objective difficulty, such as population density, steepness, and the need to cross water barriers. There is also evidence that states’ actual practice was in fact to build more difficult sections first because that is where the existing traffic bottlenecks were.
A second possible, but insufficient, explanation is that cost per mile began escalating steeply because of rises in the cost of major inputs, such as labor and materials. Again, this is plausible on its face, but Brooks and Liscow write that it is not supported by actual spending figures. The real, after-inflation cost of labor didn’t change much during the period in which spending increased so dramatically. (While the Davis-Bacon Act, with its artificial wage floors, makes federal construction more expensive, that particular law dates back to 1931 and was in effect over the entire history of the interstate highway program.)
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