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: 7 The Big Dig in Boston—which was two‐​thirds funded by the federal government—exploded in cost to five times the original estimate. 8 U.S. and foreign studies have found that privately financed infrastructure projects are less likely to have cost overruns than traditional government projects. 9
Mistakes are replicated across the nation. Perhaps the biggest problem with federal intervention in infrastructure is that when Washington makes mistakes it replicates them across the nation. High‐​rise public housing projects, for example, were a terrible idea that federal funding helped spread nationwide. Federal subsidies for light‐​rail projects have biased cities to opt for these expensive systems, even though they are generally less efficient and flexible than bus systems. 10 High‐​speed rail represents another federal effort to induce the states to spend money on uneconomical infrastructure. 11
Burdensome Regulations. A final problem with federal infrastructure spending is that it usually comes part and parcel with piles of regulations. Federal Davis‐​Bacon labor rules, for example, raise the cost of building state and local infrastructure.