Bloomberg View has just published the first part of a two-part essay by Stephen Smith of Market Urbanism fame on the fact that U.S. taxpayers tend to pay far more for large-scale public infrastructure projects. It offers a number of broader lessons for the public sector:
A huge part of the problem is that agencies can’t keep their private contractors in check. Starved of funds and expertise for in-house planning, officials contract out the project management and early design concepts to private companies that have little incentive to keep costs down and quality up. And even when they know better, agencies are often forced by legislation, courts and politicians to make decisions that they know aren’t in the public interest.
Comparing American transit-construction practices with those abroad yields a number of lessons. Spain has the most dynamic tunneling industry in the world and the lowest costs. In 2003, Metro de Madrid Chief Executive Officer Manuel Melis Maynar wrote a list describing the practices he used to design the system’s latest expansion. The don’t-do list, unfortunately, reads like a winning U.S. transit-construction bingo card.
Perhaps the most ostentatious violation of Melis’s manual of best practices is expensive architecture in stations. “Design should be focused on the needs of the users,” he wrote, “rather than on architectural beauty or exotic materials, and never on the name of the architect.”
American politicians have different priorities. The Port Authority of New York and New Jersey is spending $3.8 billion on a single subway station at the World Trade Center designed by Santiago Calatrava, a Spanish architect known for his costly projects. If New York could build subways at the prices that Paris and Tokyo pay, $3.8 billion would be enough to build the entire Second Avenue subway, from Harlem to the Financial District. [Emphasis added]
Smith reminds us that it is actually American conservatives and libertarians who should be policy cosmopolitans rather than left-liberals, as the inefficiencies of the U.S. public sector stand out in particularly sharp relief in comparative perspective.
I can imagine champions of the U.S. public sector noting that, as Smith notes, U.S. transit agencies are often starved of funds and expertise for in-house planning, which is true. There is a profound short-sightedness in terms of where and how U.S. transit agencies spend, and the right shares the blame. Yet a lack of flexibility regarding staffing levels and compensation often contributes to the neglect of investments in in-house planning and other domains that could actually yield significant savings over time, as the political costs associated with identifying redundancies is much higher than that of starving transit systems of analytical resources. This doesn’t just apply to transit agencies, suffice it to say.