Why Does Our Infrastructure Resemble a Third World Country’s?

BY: Alex Marshall | February 2012

Take a look around your community and I bet you’ll see pothole-filled roads, rusting bridges and decaying train stations. It is rare, rather than the rule, to see unblemished asphalt, gleaming railings and bright platforms. Yet we are, by all estimates, one of the richest societies in the world. What gives?

First of all, although my evidence is largely anecdotal, I have no doubt that the state of affairs I describe above is true. Americans traveling to other developed countries notice the difference, as do foreigners when they come here.

A German graduate student once told me he was amazed at the poor roads, sidewalks and other features in Cambridge, Mass., where we were both living and studying at the time.

“It looks like a third-world country here, ” he said. “Apparently, no one cares.”

I don’t think that is the case, but I do think we have become accustomed to a lower-quality public environment, one that would not be tolerated in France, Germany or Japan. It was already ironic that Cambridge, a rich, liberal city that lavishes praises on the public sector, put up with it. Regardless, the chronic maintenance cutbacks in this country result in shoddy-looking and poor- performing infrastructure systems, more accidents and a negative impact on economic capacity.

One explanation may be our budgeting process. States and cities generally pay for maintenance from annual operating budgets. You can’t borrow money to repair a pothole. That leaves the pots of money set aside as tempting targets.

“Maintenance budgets are one of the first places mayors and governors look for money to fill budget shortfalls, ” says William Reinhardt, editor of Public Works Financing. “That’s because the effects of underfunding maintenance are not immediately obvious.”

In contrast, states and cities borrow money to build new roads, bridges and train lines. It can be tempting to use the money that would have gone for maintenance to pay the interest costs on bonds sold to build new stuff. Political pressures come to bear as well. Developers and real estate interests often clamor for new highways and other infrastructure, and fund politicians who support them. While citizens whine about potholes, they rarely vote on that basis.

Whatever the reason, peculiar budgeting practices occur. A transit manager at a major American city told me a revealing story during a tour:

“See those lights, ” said the official, pointing to some bulbs within some rusting metal frames hanging over the platform. “It would only cost about $1, 000 a year to maintain those well. We can’t get that. So instead, we will wait until they rust out and fail completely. Then we will replace them, at a cost of perhaps $100, 000.” This is poor governance and poor economics, to say the least.

“Every dollar spent in keeping a good road good precludes spending $6 to $14 to rebuild one that has deteriorated, ” says Reinhardt. “This is another example of kicking the can down the road — a case of bad governing that has a huge future cost.”