Title: Encouraging Private Infrastructure Investment | Cato Institute
Headings: Encouraging Private Infrastructure Investment
Encouraging Private Infrastructure Investment
Federal Infrastructure in Perspective
Global Trend Toward Privatization
Hurdles to Private Infrastructure Investment
Notes
About the Author
Chris Edwards
Director of Tax Policy Studies and Editor, Down​siz​ing​Gov​ern​ment​.org

Content: Amtrak investment, for example, has long been spread around to low‐​population areas where passenger rail makes little economic sense. Most of Amtrak’s financial losses come from long‐​distance routes through rural areas that account for only a small fraction of all riders. 5 Every lawmaker wants an Amtrak route through their state, so investment gets misallocated away from where it is really needed, such as the Northeast corridor. Investments are utilized inefficiently. Government infrastructure is often utilized inefficiently because supply and demand are not balanced by market prices. The vast water infrastructure operated by the Bureau of Reclamation, for example, greatly underprices irrigation water in western United States. The result has been wasted resources, harm to the environment, and a looming water crisis in many areas in the West. 6
Investment is mismanaged. Federal agencies don’t have the strong incentives that private businesses do to ensure that infrastructure projects are completed and operated efficiently. Federal highway, energy, airport, and air traffic control projects, for example, have often suffered large cost overruns.