Economic Impact of Infrastructure Investment

Economic Impact of Infrastructure Investment. Congressional Research Service, Library of Congress. Jeffrey M. Stupak. July 18, 2017

Infrastructure investment has received renewed interest as of late, with both President Trump and some Members of Congress discussing the benefits of such spending. Infrastructure can be defined in a number of ways depending on the policy discussion; in general, however, the term refers to longer-lived, capital-intensive systems and facilities, such as roads, bridges, and water treatment facilities.

Over the past several decades, government investment in infrastructure as a percentage of gross domestic product (GDP) has declined. Annual infrastructure investment by federal, state, and local governments peaked in the late 1930s, at about 4.2% of GDP, and since has fallen to about 1.6% of GDP in 2016. State and local governments consistently spend more on infrastructure directly than the federal government. In 2016, direct federal spending on nondefense infrastructure was less than 0.1% of GDP, whereas state and local spending was about 1.5% of GDP. However, the federal government transfers some funds each year to state and local governments for capital projects, which includes infrastructure projects, equaling about 0.4% of GDP in 2016. The United States also lags many other developed countries with respect to annual infrastructure spending. Spending on infrastructure, as a percentage of GDP, is higher in all G7 countries, except for Italy and Germany, than in the United States.

[PDF format, 19 pages, 813.5 KB].

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Transport Pricing and Accessibility

Transport Pricing and Accessibility. Brookings Institution. Kenneth Gwilliam. July 2017

A common criticism of urban transport strategies is that they are unduly concerned with mobility or the ability to move rather than accessibility in which a desired journey purpose can be satisfied. It is often further argued that a consequence of this focus on mobility, particularly motorized mobility, is that transport is not affordable to the poor, and that this exclusion justified the use of subsidies to remedy the situation. A key element of “Moving to Access” is thus concerned with increasing the affordability of transport for the poor. The objective of this paper is to explore the relationships between mobility, accessibility, affordability and transport prices and subsidies in more detail with a view to better reconciling the economic efficiency of the urban transport systems with the welfare of the poor. [Note: contains copyrighted material].

[PDF format, 46 pages, 595.9 KB].

Informing Pittsburgh’s Options to Address Lead in Water

Informing Pittsburgh’s Options to Address Lead in Water. RAND Corporation. Linnea Warren May, Jordan R. Fischbach, Michele Abbott. June 27, 2017.

Pittsburgh, Pennsylvania is currently struggling to manage and improve its aging water system, with a focus on elevated lead levels for many customers. The issue is well covered in the local media, and several steps are being taken or proposed for remediating lead in Pittsburgh’s tap water. Under federal and state regulatory action and pressure from residents, the city is at a critical decision point for addressing the issue of lead in its water. This Perspective reviews the history and recent developments related to the use of lead in Pittsburgh’s water system and the policy options for lead remediation currently being weighed by local decisionmakers.

The authors review the costs, regulatory barriers, and feasibility of the various options under consideration, including the City of Pittsburgh’s new Safe Water Program and multiple pipe replacement options. They conclude with recommendations, including ensuring optimal pipe corrosion control and filtering in the immediate term and pursuing innovations from other cities to reduce the public and private costs of the permanent solution of full lead service line replacement. [Note: contains copyrighted material].

[PDF format, 33 pages, 821.51 KB].

IOT, Automation, Autonomy, and Megacities in 2025: A Dark Preview

IOT, Automation, Autonomy, and Megacities in 2025: A Dark Preview. Center for Strategic & International Studies. Michael Assante, Andrew Bochman. April 26, 2017

This paper extrapolates from present trends to describe plausible future crises playing out in multiple global cities within 10 years. While predicting the future is fraught with uncertainty, much of what occurs in the scenarios presented here is fully possible today and, absent a significant course change, probable in the timeframe discussed.

It is not hard to find tech evangelists touting that ubiquitous and highly interconnected digital technology will bring great advances in productivity and efficiency, as well as new capabilities we cannot foresee. This paper attempts to reveal what is possible when these technologies are applied to critical infrastructure applications en masse without adequate security in densely populated cities of the near future that are less resilient than other environments. Megacities need and will deploy these new technologies to keep up with insatiable demand for energy, communications, transportation, and other services, but it is important to recognize that they are also made more vulnerable by following this path. [Note: contains copyrighted material].

[PDF format, 16 pages, 294.46 KB].

If You Build It: A Guide to the Economics of Infrastructure Investment

If You Build It: A Guide to the Economics of Infrastructure Investment. Brookings Institution. Diane Whitmore Schanzenbach, Ryan Nunn, and Greg Nantz. February 7, 2017

A founding principle of The Hamilton Project’s economic strategy is that long-term prosperity is best achieved by fostering economic growth and broad participation in that growth. In that spirit, this paper seeks to provide an economic framework for evaluating infrastructure investments and their methods of funding and finance. Why should we invest in infrastructure, what projects should be selected, who should decide, and how should those investments be paid for are all questions that can be better answered with the help of sound economic theory and evidence. [Note: contains copyrighted material].

[PDF format, 12 pages, 509.79 KB].

Delivering on Sustainable Infrastructure for Better Development and Better Climate

Delivering on Sustainable Infrastructure for Better Development and Better Climate. Brookings Institution. Amar Bhattacharya et al. December 23, 2016

2015 was a milestone year in which the world set clear and ambitious objectives through the Third International Conference on Financing for Development in Addis in July; the UN Summit in September that adopted the Sustainable Development Goals and the 2030 development agenda; and the COP21 in Paris in December that resulted in the milestone climate agreement. The three central challenges now facing the global community, as crystallized in 2015, are to reignite global growth, deliver on the sustainable development goals (SDGs), and invest in the future of the planet through strong climate action. At the heart of this new global agenda is the imperative to invest in sustainable infrastructure. [Note: contains copyrighted material].

[PDF format, 160 pages, 5.62 MB].

Funding and Financing Highways and Public Transportation

Funding and Financing Highways and Public Transportation. Congressional Research Service, Library of Congress. Robert S. Kirk, William J. Mallett. November 1, 2016

For many years, federal surface transportation programs were funded almost entirely from taxes on motor fuels deposited in the Highway Trust Fund (HTF). Although there has been some modification to the tax system, the tax rates, which are fixed in terms of cents per gallon, have not been increased at the federal level since 1993. Prior to the recession that began in 2007, annual increases in driving, with a concomitant increase in fuel use, were sufficient in most years to keep revenue rising steadily. This is no longer the case. Although vehicle miles traveled have recently surpassed prerecession levels, future increases in fuel economy standards are expected to reduce motor fuel consumption and therefore fuel tax revenue in the years ahead.
Congress has yet to address the surface transportation program’s fundamental revenue issues, and has given limited legislative consideration to raising fuel taxes in recent years. Instead, since 2008 Congress has financed the federal surface transportation program by supplementing fuel tax revenues with transfers from the U.S. Treasury general fund. The most recent reauthorization act, the Fixing America’s Surface Transportation Act (FAST Act; P.L. 114-94), was enacted on December 4, 2015, and authorized spending on federal highway and public transportation programs through September 30, 2020. The act provided $70 billion in general fund transfers to the HTF to support the programs over the five-year life of the act. This use of general fund transfers to supplement the HTF will have been the de facto funding policy for 12 years when the FAST Act expires at the end of FY2020. The FAST Act did not address funding of surface transportation programs over the longer term. Congressional Budget Office (CBO) projections indicate that the HTF revenue shortfalls relative to spending will reemerge following expiration of the FAST Act.

[PDF format, 26 pages, 825.72 KB].