Tuesday, August 07, 2007

A Roadway to Success

Fire of Liberty

Thomas Sowell has a good column out today which notes that when it comes to politicians choosing between boring or mundane projects like building/repairing bridges or flashy projects that will make good copy and pretty pictures in the news-cycle, the politician is always going to choose the later. In fact, these politicians are always going to shy away and neglect these much needed projects for flashy projects as long as these projects remain in the political sphere. As Sowell notes, the people of America will be better served if the government stepped aside from the building and maintenance of our bridges and roadways and placed it in the private sector. Here's a look:

What really needs to be done is to change the incentives.

While most bridges in the United States are owned and operated by government agencies, there are times and places where bridges have been owned and operated by private companies, just as numerous other goods and services are provided through the marketplace.

How would that change the incentives?

A company that has to get the money to build and maintain bridges or other infrastructure through the voluntary actions of people in the financial markets, instead of being able to extract money from the taxpayers, is going to find financiers a lot more finicky about what is being done with their money. People who are putting their own money on the line are going to want to have their own experts taking a look under the bridges they finance, to see where there are rust, cracks or crumbling supports.

When people know that the lawsuits that are sure to follow after a bridge collapses are going to drain millions of dollars of their own money -- not the taxpayers' money -- that keeps the mind focussed.

Those who like to think of the government as the public interest personified may be horrified at the idea of turning a governmental function over to private enterprise.

Politicians who want to hang onto sources of patronage and power will of course encourage people to look at things that way. But the track record of privately run infrastructure will compare favorably with government-run infrastructure.

But that is only if we stop to compare -- and to think.

Even more, as Steven Malanga notes in his Wall Street Journal piece(See earlier post), the state and local government generally construct contracts with the private sector that handsomely benefits the government through several years. If politicians think the voters get excited about flashy tax payer projects just imagine how they'll be if these projects are paid by the proceeds from these projects being handed over to the private sector. Here's hoping that more governments see the light.

No comments: