CAMBRIDGE, Mass., December 15, 2021 / PRNewswire / – As governments consider major infrastructure proposals, the Lincoln Institute has released a new book that will help policymakers get a better return on public investments. Edited by José A. Gómez-Ibáñez and Zhi Liu, Infrastructure economics and policy: international perspectives includes contributions from 30 leading international scholars and practitioners on topics such as project assessment, finance, governance, climate change and technology.
The book comes out at a time when governments in many countries are viewing infrastructure as a policy instrument 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 assess infrastructure proposals.
It includes the following six takeaways to consider in any infrastructure investment program, based on extensive research into the ingredients for success:
Think about long-term growth, not a quick stimulus. Contrary to popular belief, investing in infrastructure is not an effective way to quickly stimulate the economy. It takes many years to get the permits and funding needed to start construction on a new project, and the sophisticated equipment and training required by modern construction means that such projects offer no avenues of employment. fast 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.
Questions worthy of a shovel, not ready for a shovel. The impacts of infrastructure projects depend heavily on their quality. Many infrastructure agencies are required to prepare cost-benefit analyzes of the major projects or policies they are considering and the alternatives relevant to these 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 concerns that the cost-benefit analysis does not adequately reflect the objectives of justice and equity. While cost-benefit analyzes are not perfect, they are one of the best tools available for evaluating infrastructure proposals, and agencies should be careful before significantly deviating from the option with the benefit. highest net without valid reason.
Beware of overconfidence and over optimism. Historical analysis of some 2,000 infrastructure projects found that actual costs were considerably higher than expected, while utilization was considerably lower, 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 the overconfidence bias and the optimism bias. It’s hard to combat these biases because they’re so deeply rooted in human nature, but the book describes measures that can help, such as making forecasters legally accountable or using independent audits.
Take equity seriously. The costs and benefits of infrastructure projects are often unevenly distributed. On the one hand, large infrastructure such as highways and power plants are often built in places where negative impacts are disproportionately felt by low-income residents and people of color. On the other hand, lack of access to basic infrastructure, especially in developing countries, undermines the quality of life and contributes to inequalities. Governments must take these two problems seriously and adopt complementary policies to address them.
Take into account governance challenges. State and local governments have historically 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, in particular one focused on decarbonizing the energy system to combat climate change, will increase the role of the national government. National governments are uniquely positioned 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 that lose. of their value. These governance and other infrastructure challenges may prove to be even more difficult than the financial challenges on which current debates focus.
Invest for the future and solve radical uncertainties. In the face of radical uncertainties such as climate change, the pandemic, automation and the emerging sharing economy, governments must not only fix deteriorating infrastructure, but also invest in a new generation of climate-resilient infrastructure and taking advantage of new technologies. This transformation will require overcoming significant institutional obstacles, assessing the advantages and disadvantages of new technologies and putting in place an effective change management process.
Sustainably built infrastructure is essential for resilient, equitable and liveable communities and regions around the world. Through in-depth analysis, Infrastructure economics and policy challenges conventional wisdom on several issues, from the most efficient levels of congestion charge on roads to city centers to the belief that privatization significantly affects the performance of infrastructure. With chapters covering land value capture and other financing mechanisms; the role of infrastructure in urban form, economic performance and quality of life, in particular for disinvested communities; and other essential concepts, this new book offers evidence-based solutions and policy considerations for officials in government agencies and private companies that oversee infrastructure services, for students, and for lay readers focused on issues. policies.
For more information or to order a copy of Infrastructure economics and policy, visit https://www.lincolninst.edu/publications/books/infrastructure-economics-policy.
Praise for Infrastructure economics and policy
“This informative and timely book offers a wealth of information: comparisons between sectors and countries, the link between policy ideas and implementation, and the evaluation of remarkable experiences.”
– Weiping Wu, Director of the MS Urban Planning Program, Columbia University
“The content is very relevant right now. As countries around the world design economic stimulus and COVID-19 pandemic stimulus packages, the issue of infrastructure has – once again – returned to the forefront of political discussions. The analysis and policy recommendations and lessons will be invaluable to developed and developing countries.
– Ede Ijjasz-Vasquez, former regional director of sustainable development, Africa, World Bank
“A wonderful collection of essays from 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 crammed with fascinating detail, it will, I have no doubt, be the benchmark work in this field for years to come. “
– Alan altshuler, Ruth 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 launching next-generation national 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 better resource for academics and practitioners than this timely volume. Leading figures in infrastructure policy are addressing challenges ranging from measuring the economic impacts of 20th century major public works to integrating emerging and decentralized transport and energy technologies today, all under a large and fascinating tent. “
– Sheila olmstead, professor of public affairs, Lyndon B. Johnson School of public affairs, The University of Texas at Austin
“Infrastructure seems to be on everyone’s mind, United States, China, and 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, finance and innovation in a way that generates important information. This book is an intellectual assortment. He has something for everyone. “
– Daniel Sperling, founding director, Institute of Transportation Studies, University of California, Davis; Distinguished Blue Planet Prize 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 stimulating and insightful analysis of infrastructure policy and practice and the challenges and opportunities that governments face when making investments. major in infrastructure. “
– Polly Trottenberg, Transportation practitioner and policy expert, former New York Transportation Commissioner
About the editors
José A. Gómez-Ibáñez is Derek C. Bok Professor Emeritus of 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 efficient use, taxation and management of land. A private, non-profit foundation with origins dating back to 1946, the Lincoln Institute researches and recommends 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.
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SOURCE Lincoln Institute of Land Policy