Infrastructure spending, a critique

This past summer, Harvard economics professor Edward Glaeser wrote a powerful critique of infrastructure spending. His article, which appeared in the City Journal, was a response to a proposal by Bernie Sanders to spend $1 billion on public infrastructure. But Glaeser’s arguments apply to similar proposals by other politicians and might well apply to the proposal Donald Trump offers, assuming he follows through on his pledge to rebuild America’s infrastructure.

Glaeser identifies three beliefs that underlie the allure (at least for liberals) of infrastructure spending. First, it supercharges economic growth. Second, it creates jobs, thereby fighting unemployment during a downturn. Third, it fulfills a national responsibility.

Glaeser disputes each of these views. First:

While infrastructure investment is often needed when cities or regions are already expanding, too often it goes to declining areas that don’t require it and winds up having little long-term economic benefit.

This likely will be the case with a Trump infrastructure spending plan because he has promised to rebuild American inner cities.

Glaeser notes that Japan has tried to stimulate its economy through infrastructure spending. It hasn’t worked.


As for fighting recessions, which require rapid response, it’s dauntingly hard in today’s regulatory environment to get infrastructure projects under way quickly and wisely.

As President Obama famously put it, “shovel-ready was not as shovel-ready as we expected.”

Third, viewing infrastructure revival as a task for Washington is misguided:

Centralized federal tax funding of these projects makes inefficiencies and waste even likelier, as Washington, driven by political calculations, gives the green light to bridges to nowhere, ill-considered high-speed rail projects, and other boondoggles.

America needs an infrastructure renaissance, but we won’t get it by the federal government simply writing big checks. A far better model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.

There’s much more to Glaser’s article. You should read the whole thing. So should Trump’s transition team.


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