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: Problems with Federal Infrastructure Spending
There are frequent calls for increased federal spending on infrastructure, but advocates usually ignore the problems and failures of past federal efforts. There is a history of pork‐​barrel politics and bureaucratic mismanagement of many types of federal investment. Here are some of the problems: Investment is misallocated. Federal investments are often not based on actual marketplace demands. 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.