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Love of the ribbon

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The Guardian, 'zombie trsin'

Ribbon-cutting, orangewear and hard hats offer photo-opportunities which politicians like George Osborne and Andrew Adonis find hard to resist. But unless an investment addresses a clear public need, the outcome can be a white elephant.

[Here’s what to look out for when politicians promise to spend big on infrastructure, Jenny McArthur, UCL, 2 June 2017]

Infrastructure spending can be broadly divided into capital expenditure (building new things), operations (running what we already have) and maintenance (repairing what we already have). Getting value from infrastructure requires good decisions across all three categories.

Politicians love building new infrastructure: ribbon-cutting, high-vis vests and hard hats are a PR opportunity which few can resist. Photo-ops aside though, politicians may also favour big projects over smaller ones because it’s easier to overcome opposition and see them through to fruition. Yet investments in big-ticket infrastructure projects should be made with clear goals in mind. Unless an investment addresses a clear public need, it can easily result in a white elephant.

For example, the rationale for the UK’s HS2 – a high-speed rail link between London and northern England – has changed several times throughout its planning phase, suggesting that it may be a project searching for a problem to solve. What’s more, the project’s ability to regenerate the country’s north (one of it’s key selling points) may depend on complementary investments across the region, in addition to the rail link. Critics of the project claim it could be a costly mistake.

[…] Since the 1980s, governments worldwide have relied on the faulty assumption that infrastructure investment stimulates economic growth. The problem with this is that you can’t easily detect cause and effect – so it’s difficult to tell whether large-scale infrastructure investment actually causes growth. Statistical analysis of empirical studies between 1990 and 2012 found that, on average, the correlation between investment and growth was positive but small – and highly variable. The wisdom of making public investment decisions based on such evidence is questionable.

Instead, new research suggests that the link between infrastructure investment and growth actually hinges on the quality of government. Government quality is determined by several measures, including transparency, appropriate use of evidence and expertise and robust processes within institutions responsible for infrastructure investment.

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Written by beleben

September 7, 2017 at 10:26 am

Posted in HS2, Politics

One Response

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  1. Spending even on ‘desirable’ projects needs to be thought out. The people of Birmingham want local train services but for instance even at peak times the Birmingham to Tipton train interval is 38 minutes (that’s a lot of hanging around). The train planners do not want local rail. Their solution is rail for longer distance. The station built on the edge of Stratford has barely any useage, East Midlands Parkway flopped, and it is unknown if the doubling of the track to Redditch (never in the LTP) is paying off. Are there figures ? Surely transport planning and taking account of consultation responses, should be the way forward ?

    John

    September 9, 2017 at 8:35 pm


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