3. If you want good cheap infrastructure, build up state capacity

America has a big problem building infrastructure. Our roads and trains cost much more per mile than other rich countries. There are a number of reasons why this is the case, including land-use regulation, NIMBYism, and broken government contracting processes. But one reason is simply that the U.S. lacks state capacity . We used to have a bunch of highly competent government bureaucrats who knew how to get roads and trains built; then, starting in the 1970s, we fired a bunch of those workers and let much of the in-house expertise decay into nothingness. In its place we hired a bunch of expensive outside consultants whose goal was maximizing their own payouts from the government, rather than providing high-quality infrastructure for the citizenry at a reasonable cost to the taxpayer.

This has been one conclusion of the Transit Costs Project, a panel of experts that has devoted years to studying the problem of rail costs in the U.S. In a recent report on how America could actually build high-speed rail, they reiterate the importance of in-house expertise vs. outside consultants:

With a bank of rail experts in Washington and universities churning out grads with relevant skills, individual projects could reduce their reliance on consultants and do more work in-house. (This was also a recommendation of a previous Transit Costs Project study about local mass transit.) To take a related example, for the price of one consultant contract to study whether to put trash in garbage bins or not, you could hire 10 in-house experts for four years to create a culture of trash expertise at the heart of local government.

But this isn’t just speculative. BART, the Bay Area’s commuter rail service, has been replacing its rolling stock (that’s a fancy name for train cars), which it calls the Fleet of the Future project. It has been accomplishing this within a reasonable time frame — not as fast as Japan would, but much faster than we’ve come to expect from California infrastructure projects. And unlike most other California infrastructure projects, Fleet of the Future has come in way under budget!

In a recent update, BART explains the secrets of their success:

BART’s popular Fleet of the Future project has just completed one milestone, with the final car of the original contract now ready for service...In the six years since the first Fleet of the Future train first went into service, the new trains have gone from a surprising sight for riders to an everyday part of their trip....

The increased pace in production and delivery of the new fleet has been essential to the transition. Car manufacturer Alstom is now delivering 20 cars a month to BART, almost twice as many as the 11 cars a month stipulated in the original delivery schedule...

The quicker tempo of deliveries is one of the reasons the Fleet of the Future project is expected to come $394 million under budget. Another big cost saver was BART’s decision to have its own highly experienced staff do more of the engineering work in house. The project team, led by John Garnham, has included engineers who have successfully completed new rail car projects at other agencies. (emphasis mine)

State capacity, folks. It really works. America needs more and better bureaucrats for things like infrastructure, because the alternative is to throw huge amounts of taxpayer money at inefficient outside contractors.

from At least five interesting things for your weekend (#45)