Transport infrastructure has been big news in the US this year, with the Biden administration's plans for US$312 billion in new spending. So, I was interested to read this 2020 NBER Working Paper (ungated version here) by Gilles Duranton (University of Pennsylvania), Geetika Nagpal, and Matthew Turner (both Brown University). Duranton et al. first document the quantity and quality of the interstate highway network, bridges, public transit buses, and subways. Second, they look at how (primarily public) spending on transport has evolved over time, and the implied unit costs of different transport modes. Third, they summarise the literature on the effects of infrastructure on economic growth and congestion.
First, a digression. I also found these two factoids really interesting:
The New York subway system carries about 71% of all subway riders and about 31% of all public transit riders in the whole country...
...a single combination truck causes about as much damage to a highway as about 2.1 commute hours of automobile traffic...
Having travelled on several public transit systems in the US, I had no idea how dominant the New York subway system was overall. And, there is definitely a case for trucks to be paying more towards the cost of maintaining roads (in the US, and here in New Zealand).
Anyway, getting back to the central theme of the paper, the overall conclusion is that:
Massive investments in transportation infrastructure seem to draw support from across the political spectrum. These policies are often motivated by claims that our current infrastructure is crumbling or that such investments will spur economic growth. The available evidence does not support these claims.
In other words, they find little evidence that infrastructure is crumbling, and while there is evidence that transport infrastructure affects the location of economic activity, there is little evidence that it affects economic growth overall. Infrastructure investment also doesn't reduce congestion, because additional lane miles of roadway encourage more driving. So, I guess there is good news if you are a local planner in a peri-urban area trying to steal a bit of economic activity away from the urban area, but no such good news for a national planner.
In all the arguments over transport infrastructure in New Zealand, it may be that the current government's reluctance to invest in more road infrastructure will be neutral in terms of its impact on economic growth. That doesn't mean that we should be investing in crazy cycle bridge projects.
[HT: Marginal Revolution, last year]
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