Make the infrastructure bill tell us cost of each bridge, road, and train

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Traffic leaves San Francisco at the beginning of the 4th of July holiday weekend on June 30, 2006 in San Francisco, California. 

Congress and the White House could soon finally agree to an infrastructure bill. If the federal government does indeed decide to spend almost one-tenth of the nation’s gross domestic product on infrastructure, the public should have one small request: tell us the costs.

To the surprise of many — ourselves included — there is broad agreement that it costs much more to build infrastructure in the free market United States compared to union-heavy, regulation-saturated Europe. Anecdotal evidence demonstrates that the cost of infrastructure in the U.S. is high and growing. The Second Avenue subway in New York is infamous for its astronomical costs of $2.25 billion per mile. But more mundane examples are easy to find. For example, the first leg of Detroit’s I-696 highway cost $13 million per mile (in 2016 dollars) to build in 1964; the last leg in 1989 cost more than six times as much per mile.

Our research finds that Detroit’s pattern is not atypical. In real dollars, it cost about three times as much to build a highway mile in the 1980s as it did in the 1960s. Related work by others finds that these increases have continued relatively unabated to the present day.

The debate about the potential causes of these high and increasing costs is ongoing. It’s unlikely to be material prices, and it’s unlikely to be per unit labor costs, as both have budged little since the 1960s. We believe that the rise of “citizen voice” — a combination of changes in statutes, judicial doctrine, and social movements that gives citizens greater input into the decision-making process — has both democratized decision-making and added to costs.

Regardless of the cause, it’s hard to come up with a plan to control costs when we don’t know what they truly are. The cost problem is likely not limited to Interstate highways.

States know — and make public — the initial bids on infrastructure projects. However, states rarely disclose the final cost of the projects. This is critical, since it’s the divergence between the initial accepted bid and the final total cost that may drive a substantial amount of the cost increase. Thus, any new infrastructure bill should require recipients to disclose interim cost totals during the project, as well as the final total project cost. These disclosures should be published to one publicly accessible website.

Public scrutiny can change behavior, but we can’t scrutinize costs we don’t know about.

In the long run, the less money spent on any given piece of infrastructure means the more we can effectively spend on things like getting lead out of water and limiting sewage spills, and the less debt we create for future generations.

Some might argue that cost reporting is another onerous regulation that serves to paradoxically increase infrastructure costs. We suspect the opposite: When governments are required to make costs public, both the government and outside actors will increase scrutiny of these costs. This sunlight on a long-dark corner of public spending will more than outweigh the regulatory burden.

Leah Brooks is an associate professor of public policy and public affairs at the George Washington University.

Zachary Liscow is an economist and associate professor at Yale Law School who has served on the staff of the White House Council of Economic Advisors.

Tags American infrastructure Cost overrun Costs government contracting infrastructure plan Transparency

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