Three Ideas for Infrastructure Investment

From Brookings last week:

"One, we need to talk about infrastructure in specific rather than abstract terms. Take transportation. Because of the high-profile discussion about the need to shore up the federal highway trust fund, we assume that Washington has the largest role in transportation. But in reality, since 2007 the federal share of total spending on roads and public transit is only about25 percent. States (40 percent) and localities (36 percent) each play a larger role. For other sectors, such as freight rail, telecommunications, and clean energy, the federal funding role is even smaller or nonexistent. By overemphasizing the federal role we fail to recognize the diverse and highly fragmented ways that America selects, builds, maintains, operates, and pays for critical assets as different as seaports, broadband, and water.

Second, to get around fiscal austerity and political gridlock, we must change the way we fund and finance individual sectors of infrastructure. While a handful of state and metropolitan leaders are finding innovative ways to stretch infrastructure dollars and get projects done, most still struggle with financial, regulatory, political, and institutional hurdles. Developing truepartnerships between government agencies, private firms, financiers, and the general public is how many nations successfully develop infrastructure around the world today. The nature and mix of public and private arrangements will likely be customized depending not only on individual transactions but also on the nature of the particular infrastructure sector.

Third, we need to change the way we prioritize investments so infrastructure derives from real and actionable economic, social, and environmental goals, and not from the vagaries of local or regional funding for this or that project. This means making investments in freight connectivity to enable access to metropolitan markets through modern global value chains, making investments that support the transition to cleaner and more abundant domestic energy sources, and focusing on green infrastructure to absorb and manage water rather than rely on costly over-engineered solutions."