Infrastructure

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.

Many agree on the need for increased investment in America’s aging infrastructure, including roads, bridges, and airports. This set of economic facts provide objective background to help guide necessary policy and political discussions.

The nation’s transportation infrastructure, it is widely agreed, is eroding and in need of long-term, innovative policy solutions and adequate investment. In this discussion paper, Roger Altman, Aaron Klein, and Alan Krueger propose improvement and expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) lending program, reauthorization of Build America Bonds, better utilization of the Army Corps of Engineers and the Harbor Maintenance Trust Fund, and reform of the federal gas tax.

The United States’ aging water infrastructure will be increasingly strained by population growth, economic expansion, and the effects of climate change. In this Hamilton Project paper, Newsha K. Ajami, Barton H. Thompson, Jr., and David G. Victor suggest that solutions to the country’s growing water challenges lie, in part, with the development and adoption of new innovative technologies. The authors present three policy and regulation recommendations to facilitate greater innovation in the water sector.

David Conrad and Ed Thomas explore how the National Flood Insurance Program and other federal disaster relief programs could be reformed to better align the costs and benefits of living in disaster-prone areas and help put the budget on more sound footing. This proposal aims to reduce budget costs of natural disasters and reduce risk to life and property of Americans living in disaster-prone areas.

Investments in infrastructure are essential for a vital economy. Tyler Duvall and Jack Basso suggest looking to user fees as a way to raise revenues, reduce congestion on major roadways, reduce pollution, and promote wiser infrastructure investments.