FIXING AMERICA`S SELF-INFLICTED INFRASTRUCTURE CRISIS / PROJECT SYNDICATE

Fixing America’s Self-Inflicted Infrastructure Crisis

Thousands of infrastructure projects across the United States are mired in red tape, driving up prices and eroding Americans’ quality of life. The solution is not more technology or consultants, but rather rebuilding government capacity by hiring and retaining skilled engineers to manage projects efficiently and control costs.

Zachary Liscow, Cailin Slattery

WASHINGTON, DC – Infrastructure construction costs are rising everywhere, but the United States is in a league of its own. 

Urban rail projects, for example, cost roughly three times more per mile in the US than in other rich countries.

Thousands of infrastructure projects have become mired in red tape, leaving roads, airports, and energy networks – the US economy’s essential connective tissue – in a state of disrepair. 

The result is a self-inflicted scarcity that erodes Americans’ quality of life by slowing economic growth, driving up consumer prices, increasing traffic congestion, and impeding the clean-energy transition.

It doesn’t have to be this way. 

There is one thing we can do today to start building again: invest in skilled civil servants. 

Solving our infrastructure woes will depend as much on human expertise as on technological innovation.

The numbers speak for themselves. 

Over the past two decades, US states have been quietly hollowing out their transportation departments (DOTs). 

Between the Bill Clinton and Joe Biden administrations, the number of people working in state DOTs shrank by about 20%, even as populations and infrastructure work grew. 

Yet infrastructure costs were already rising long before that. 

Between 1960 and 1980, real spending per mile on Interstate highway construction more than tripled. 

Today, the US spends over $200 billion annually on building and maintaining its roads.

To understand whether shrinking workforces and rising costs are related, we collected data from highway resurfacing projects in all 50 states and examined every California highway construction project from 2011 to 2018. 

We found that increasing the quality and quantity of public-sector engineers pays for itself many times over. 

On average, states with well-staffed DOTs have lower costs; one additional DOT employee per 1,000 residents is associated with a 26% reduction in project costs. 

In California, a single experienced engineer can save the state up to $750,000 a year.

Infrastructure projects are inherently complex and demand significant expertise. 

Consider just one part of a public-sector engineer’s job: managing private contractors. 

Currently, a small number of government engineers oversee massive private contracts to build roads, bridges, and other critical infrastructure. 

Their job is to solicit multiple bids and select the right one – a delicate process that can determine whether a project comes in under budget or spirals out of control.

Once the winning bid is chosen, those same engineers must oversee the contractors they hire, preventing delays, change orders, and miscommunication. 

They also make crucial decisions about what to build, where to build it, and how. 

These choices involve extensive planning and permitting processes that can be slow and costly or efficient and economical, depending on the engineer’s experience and judgment.

Our research shows that the best engineers can save more than three times their own salaries simply through skill and effective management. 

Unfortunately, experienced engineers are retiring nationwide, and states are not replacing them fast enough. 

Consequently, governments are hemorrhaging public funds with less and less to show for it.

We surveyed government engineers in every US state, along with the private contractors they work with. 

Both groups told the same story: with seasoned staff departing and few new hires to take their place, mismanagement and delays have become routine. 

Outsourcing to expensive consultants often makes matters worse, especially when there are not enough government workers to supervise them. 

Without adequate oversight, consulting firms can drive up costs, partly because they are incentivized to do more work, not less. 

Even private contractors said they feel hampered by states’ staffing decisions.

In the year after a senior engineer retires, a state can end up paying six times that engineer’s annual salary in additional project costs. 

In California, where engineers can retire early with a public pension and move to higher-paying private-sector jobs, this talent drain costs the state tens of millions of dollars each year. 

Our analysis suggests California would still save money even if it raised top engineers’ salaries from the current $168,000 cap to $300,000 in order to retain them.

That is not to suggest that hiring more people would automatically solve every problem, or that a smaller, leaner government is bound to fail. 

But our research shows that experience matters, and that when it comes to downsizing, governments should measure twice and cut once.

These findings point to a straightforward, workable strategy for building more with less: strengthen government capacity by hiring and retaining experienced workers. 

Weak institutions are bleeding public money, and governments could begin to reverse the trend with a simple notice: “Help wanted. Competitive salary.”

Not everyone has forgotten how to build. 

The key is finding – and keeping – the right people. 

Sometimes, more government gets in the way. 

Other times, more government is exactly what the job requires.

Zachary Liscow, a former Chief Economist at the Office of Management and Budget at the White House, is Professor of Law at Yale Law School.

Cailin Slattery is Assistant Professor of Business and Public Policy at UC Berkeley’s Haas School of Business.