Three Steps for Coping with your Infrastructure Problem
Admitting you have a problem is often the first step in fixing the problem. Not so for America’s infrastructure. Landfills and email inboxes are clogged with reports documenting the need to reinvest in existing infrastructure and the need to build new. Public figures from Donald Trump to Elizabeth Warren recognize the importance of infrastructure investment. But despite important progress in framing infrastructure as a key economic driver, we still have a long way to go to correct a half-century of bad habits and underinvestment and make the delivery, design, and financing of infrastructure the norm rather than the exception.
Three important changes need to occur in order to correct these bad habits.
One, we need to talk about infrastructure in specific rather than abstract terms. Take transportation. Because of the high-profile discussion about the need to shore up the federal highway trust fund, we assume that Washington has the largest role in transportation. But in reality, since 2007 the federal share of total spending on roads and public transit is only about 25 percent. States (40 percent) and localities (36 percent) each play a larger role. For other sectors, such as freight rail, telecommunications, and clean energy, the federal funding role is even smaller or nonexistent. By overemphasizing the federal role we fail to recognize the diverse and highly fragmented ways that America selects, builds, maintains, operates, and pays for critical assets as different as seaports, broadband, and water.
Second, to get around fiscal austerity and political gridlock, we must change the way we fund and finance individual sectors of infrastructure. While a handful of state and metropolitan leaders are finding innovative ways to stretch infrastructure dollars and get projects done, most still struggle with financial, regulatory, political, and institutional hurdles. Developing true partnerships between government agencies, private firms, financiers, and the general public is how many nations successfully develop infrastructure around the world today. The nature and mix of public and private arrangements will likely be customized depending not only on individual transactions but also on the nature of the particular infrastructure sector.
Third, we need to change the way we prioritize investments so infrastructure derives from real and actionable economic, social, and environmental goals, and not from the vagaries of local or regional funding for this or that project. This means making investments in freight connectivity to enable access to metropolitan markets through modern global value chains, making investments that support the transition to cleaner and more abundant domestic energy sources, and focusing on green infrastructure to absorb and manage water rather than rely on costly over-engineered solutions.
In many respects, America’s ability to fully realize its competitive potential depends on making smart infrastructure choices. But it’s time to stop talking about infrastructure problems and start talking about solutions.