Title: Infrastructure Investment | Downsizing the Federal Government
Headings: Infrastructure Investment
Infrastructure Investment
Federal Infrastructure in Perspective
Problems with Federal Infrastructure Spending
Global Trend toward Privatization
Privatizing Federal Infrastructure
Removing Barriers to State and Local Privatization
Conclusions

Content: 1 However, infrastructure investment will only spur economic growth if it is allocated to high-value projects and constructed in a cost-effective manner. Federal investments have a poor record in this regard. Decades of experience show that federal involvement in infrastructure often leads to waste and inefficiency. Funds are misallocated and projects get bogged down in mismanagement and cost overruns. These sorts of problems have plagued federal infrastructure since the 19th century. This study discusses the problems of federal spending on infrastructure. It argues that the states and private sector are more likely to make sound investments without federal aid and regulations distorting their decisionmaking. The study also examines the global trend toward privatization. Many countries have partly or fully privatized highways, airports, air traffic control, seaports, and other infrastructure over the past three decades. Federal policymakers should study the reforms abroad and work to reduce barriers to private infrastructure investment in the United States.