Last week, Walter Russell Mead had an op-ed in The Wall Street Journal arguing that traditional infrastructure spending will no longer provide the services people want and that the pro-growth focus should be on telecommunications "infostructure." There's some truth to the fact that people will be able to do more online -- telecommuting and shopping to name just a couple. While I still believe unsexy transportation, water, and wastewater infrastructure are more important to future growth than Mead gives them credit, he does highlight some serious policy problems with our current infrastructure programs. But he misses a big one.
Today, the Journal runs my letter response explaining the underlying problem Mead omitted from his discussion:
Mr. Mead correctly identifies three major problems facing infrastructure funding: nimbyism, cronyism and an outdated vision of what infrastructure ought to be. However, there is a greater underlying problem: the concentration of infrastructure spending decisions in Washington. For example, the national highway system's major corridors are funded 80% by the federal government and only 20% by the states.
The stated purpose of federal funding of transportation infrastructure is to promote interstate mobility. But this funding arrangement reduces local accountability, leading to pork-barrel infrastructure investments of dubious value at the expense of maintaining or reconstructing existing infrastructure. These misallocations reduce the long-run efficiency of the network, costing more than just government largess.
If all infrastructure investment decision-making were to be devolved to the states, investment in wasteful projects would still occur but not with the same high frequency as under the federal status quo. Removing Washington from the equation is the only way for Mr. Mead's 21st-century vision to be realized.
Competitive Enterprise Institute