Infrastructure: National Roles Without National Policy

Introduction

A national infrastructure policy is a fanciful notion. America has never had a national infrastructure policy and striving for one would distract us from more important work to improve our infrastructure. There is no consensus as to the definition of infrastructure. There is no agreement on public policy but great interest in advancing particular local interests. A “national infrastructure policy” would likely be an abstract framework or set of principles meant to guide government actions in pursuit of shared public goals (Cochran & Malone, 2014). Such a framework would be ignored when policy is actually enacted. It would be wiser and more accurate to understand our de facto infrastructure policy as the way America spends national resources since statements of principles can be ignored and Congress often doesn’t “put its money where its mouth is” (Wachs, 2020). We agree that public expenditures to build and maintain infrastructure should be effective, efficient, and equitable. However hard we try and however sincere our effort, we never agree on the meanings of terms like infrastructure, policy, effectiveness, efficiency, and equity. Why create a policy composed of such words? The considerable effort required to reach consensus on a national infrastructure policy would be political theater. America instead can take many practical and important steps to manage and improve its infrastructure regardless of whether it has a document called a “national infrastructure policy.”

The Impossibility of a National Infrastructure Policy

Professor Netzer argued in 1992 that “the consequences of infrastructure deficiencies are almost entirely local rather than national.” He also pointed out that every government and most citizens oppose most tax increases and that virtually all governments lack adequate asset management and replacement strategies (Netzer, 1992). His messages are as valid today as they were when he addressed the question, but there are reasons beyond those he cited to question the value of a national infrastructure policy. America’s diverse and complex infrastructure consists of many overlapping and interdependent systems that confound consensus and defy the notion of a coherent national policy. Infrastructure includes the interstate highway network, the air traffic control system, water and sewer pipes, electrical grids, broadband systems, and more. Railroads are privately owned infrastructure though highways are mostly publicly owned. Hospitals and schools are often considered part of infrastructure though they are governed by health care and educational policy and likely should be part of national health or education policy rather than infrastructure policy.

Infrastructure includes physical facilities, governance and administrative arrangements, and public, corporate, and individual providers and users. Managers of each and every element of infrastructure seek funding and regulations to support their unique objectives, often competing with others but occasionally joining forces with them when doing so pays off. At least half a dozen federal departments containing dozens of relatively independent divisions and programs engage with infrastructure. Fifty states, more than 3,000 counties and parishes, and over 20,000 incorporated communities in America, each pursues its own infrastructure interests. Needs and priorities differ by sector, by location, and change at different rates over time. Each of these actors would seek a national policy to serve its interests, making it impossible to craft one. The inland waterways system is in desperate need of physical repair and updating, and operates at the intersection of transportation and water policy (Transportation Research Board, 2015). It is difficult to argue that its needs could adequately be included in a national infrastructure policy that also meets the rapidly changing needs of the broadband communications sector.

Infrastructure agencies might agree on abstract principles without ever agreeing about specifics. Deliberations leading to multiple endorsements of abstract principles are not needed by any of them. Decentralization and complexity leave no realistic alternative to the pursuit of local advantage through rent-seeking by each infrastructure entity, the vigorous pursuit of earmarks, logrolling in state legislatures, and Congress to get more of what each seeks, and a variety of unique financial and governance structures that reflect local historical contexts.

A Federal Role in Infrastructure

The futility of striving toward “a” national or unified infrastructure policy does not of course prevent America from pursuing innumerable national infrastructure policies. Any forthcoming federal infrastructure bill likely will resemble the recent expansive COVID 19 International Response and Recovery Act of 2020 and the American Rescue Plan Act of 2021, two grab bags of programs that could hardly be considered coherent policy. Each lacked clear focus but included hundreds of different programs aimed at constituencies deemed worthy of federal attention by their Congressional representatives. The lesson to learn from the COVID relief programs is that it would be unrealistic to hope for a national infrastructure policy but quite realistic to hope for dozens of titles and programs in multiple national laws that address infrastructure. Instead of “a” national policy, I hope that our federal system will soon produce a flurry of national infrastructure activity. There are many ways in which Congress and the executive branch can provide leadership to our decentralized network of self-interested infrastructure providers.

Everyone associated with infrastructure wants more federal money, but federal policy must address much more than money. Telecommunications and information technology are merging with transportation infrastructure at an accelerating rate. The federal government is the only authority that can facilitate progress by creating national standards to ensure compatibility and interoperability among the many private entities competing with one another for market share. Federal action is desperately needed to protect privacy and secure data that are central to the development of “smart” infrastructure. Capabilities and needs are evolving so rapidly with respect to information technology that federal research, information dissemination, coordination, and regulation are needed in advance of any attempt to define long-lived national policies.

Some elements of infrastructure serve national interests that should be put ahead of state and local concerns (Knopman et al., 2018). Examples include the renewal, upgrading, and repair of the Interstate Highways, a national passenger rail upgrade, and the aforementioned national system of inland waterways and national air traffic control system. The federal government should do a far better job of funding, guiding and regulating these “systems of national interest.” And members of Congress do often assign these systems top national priority in their policy documents. When push comes to shove, however, each member of the Senate and the House of Representatives votes based on the interests of his or her geographic constituency. As Former House Speaker Tip O’Neill said, all politics is local. Lists of local projects end up in federal bills and national systems slip to secondary importance unless they affect the districts of influential members. A President, at least in theory, should be less parochial. So a president who commits to improving infrastructure in America might bring more attention to at least a few systems of national scope and interest.

Multiple and dissimilar federal financing programs are needed because the characteristics of infrastructure determine funding needs and the history of past federal policies both create and limit the available options. To take just one example, some infrastructure should be paid for by users because charging users is both efficient and is equitable. The capital costs of the Interstate Highway System were financed largely by the federal government through user fees—petroleum fuel and tire taxes and truck registration fees–and airport expansion was financed by user fees in the form of taxes levied on airline tickets. These approaches could be improved, but on the whole they are both efficient and equitable. For other systems, however. charging fees would defeat their purposes and create inequitable burdens. Public transit systems cannot be financed by user fees, because costs to build and maintain them exceed revenue produced by standard fares by an enormous margin. Raising the fares to recover those costs would fundamentally change US transit, which overwhelmingly serves low income populations.

When federal user fees are employed to finance infrastructure, they are accompanied by longstanding restrictions on how the revenue can be spent. Some consider those restrictions unfair, but powerful interests reliably line up to protect them. Environmentalists think fuel taxes should finance transit as well as highways, but the trucking industry and automobile clubs fiercely guard them. No sweeping or general national infrastructure policy will be able to easily overcome longstanding arrangements like these, and similar ones in every sector. Faced with the demise of motor fuel taxes as electric vehicles replace those using petroleum fuels, the federal government is considering new user fees—electronically levied per mile fees for the use of roads—because they might mimic current user fees. The fact that user charges exist creates the incentive to replace them with a functional substitute. User fees could conceivably fund a new national air traffic control system, but in other areas like education and health care, federal programs would certainly look very different because Americans don’t want to ration these programs by price. A national infrastructure policy would have to reflect the reality that each component of infrastructure has its own history, goals, customs, needs and different mixes of local, state, and national participation. Each presents different opportunities for private participation, for pay as you go financing, and for borrowing. All are important, but they call for unique and highly refined policies rather than sweeping national ones.

No National Policy but Many Policies at the National Level

Prospects are slim for a national infrastructure policy, but observable trends are creating similarities as programs evolve in different sectors. Successes are imitated and advocated by communities of policymakers and practitioners in other sectors when they seem to fit. As the nation matures and its physical systems age, we require more federal participation in the maintenance, repair, and renewal of existing systems than in the creation of new infrastructure. But that participation does not require a national infrastructure policy. Bureaucracies responsible for different forms of infrastructure are proposing that federal policy encourage increased private sector participation in infrastructure through contracting, tax credits, and various forms of public private partnerships. With low interest rates and limited available cash, federal participation in loan programs is on the rise across sectors as grant programs decline. Some sectors even borrow the names from other federal infrastructure programs. The loan program known as the Transportation Innovation and Finance Innovation Act (TIFIA), for example, led to a somewhat later loan program called the Water Infrastructure Finance and Innovation Act (WIFIA). The programs differ in detail, were created by different laws that were considered by different Congressional committees, and are funded by different sources. That’s the point. We can anticipate continuing lively debates, trial and error, imitation, and a great deal of legislation about infrastructure without anything even approximating a national infrastructure policy. America needs much better infrastructure and the federal government has much to contribute. A quest for a national policy would likely distract the nation from more important efforts to solve our many infrastructure problems.