Nov. 20, 2008 , NYC — A political consensus has developed in the United States that significantly increased spending on the nation’s aged infrastructure is necessary for America to remain prosperous. President-elect Barack Obama and the new congressional leadership have promised to push for major new investments in the nation’s transportation networks, water systems, broadband capabilities, electrical grid, and other public facilities. While supporting those investments, a new report from The Century Foundation makes clear that there are serious institutional barriers to the effective use of those funds that have to be overcome if we are to put the new dollars to use wisely. In this urgent report, the former executive director of The Port Authority of New York and New Jersey, Anthony Shorris, identifies four major issues that need to be addressed to ensure that the nation gets the most bang for the vast infrastructure investments it needs to make.

In “Breaking Down Walls: Overcoming Institutional Barriers to Infrastructure Investment,” Shorris argues that institutional and cultural barriers are becoming as responsible for our infrastructure crisis as the legacy of inadequate funding. According to Shorris, four main obstacles need to be recognized and overcome:

• Time—Projects Take Too Long. Timeframes to plan and build major projects have greatly expanded in recent years—reflecting the realities of addressing local community concerns, working through funding limitations, obtaining regulatory approvals, and overcoming political hurdles. At just the time when the news cycle and the politics it creates are becoming more and more instantaneous, endless delays drive up costs, frustrate the public, weaken support for investment—and can even leave some projects outdated before they are complete.

• Space—Communities Benefiting from Big Projects Aren’t the Ones Paying for Them. Funding for traditional infrastructure has shifted from the federal to the state and local levels, yet many big public works projects are likely to benefit multiple political jurisdictions—including some not contributing to the project funding. As long as those communities that benefit politically and economically from big investments are not the same as those who pay for them, much of the nation’s infrastructure will remain inadequate.

• Power—Interest Groups Aligned Around Funding Mechanisms Preclude Good Decision-making. Funding streams created by the federal government define much of the political and policymaking apparatus, right down to the state and local level. Vast sets of government agencies, political entities, and powerful interest groups at all three levels of government compete for dollars and influence on separate—but often related—projects, making smart tradeoffs among potential investments hard to see and even harder to organize.

• Profit—Public Interests Sacrificed to Private Ends. Often hopelessly short of money for the projects they need, states and localities are increasingly forced to turn to private sector interests to fund and even plan their most important infrastructure projects. Yet the public too often loses out when private developers, obligated to maximize return for their investors, make decisions that sacrifice the public good.

Shorris recommends new approaches that would change the way we make decisions about infrastructure to make projects more cost efficient and better focused on the public good. His recommendations include:

• Establish national institutions that would direct dedicated revenue streams toward the creation of the national and major regional public works we need. These entities should have leaders that are appointed by elected officials, and should be subject to transparency and public accountability, but operate outside the short-term political and electoral cycles.

• Create tax-exempt interstate or regional entities, supported by dedicated funding streams, to plan and take action on regional infrastructure issues.

• Change the organization of infrastructure planning and spending at the federal, state, and local levels in ways that would acknowledge the tradeoffs facing us, and in ways that better reflect the interdependency of so many pressing needs.

• Make sure public goods are publicly funded. Federal, state, and local governments need to provide the funding for the creation of core public infrastructure, so private capital can focus on what it does best—making money for investors.

“Breaking Down Walls: Overcoming Institutional Barriers to Infrastructure Investment” is the first report of The Century Foundation new series, Building a Stronger America, which focuses on providing specific, concrete ideas for upgrading the nation’s decaying and inadequate infrastructure. The goal of the series is both to deepen and to broaden the public’s understanding of the problems we now confront, while offering proposals beyond the plans already in wide circulation. Economist and author Jeffrey Madrick is the director of this project, which includes some of the nation’s top experts and academics in this field. Forthcoming reports in the series include:

• Interrelationships among Transportation, Energy, and Housing, by Joel Rogers
• Laying the Groundwork for Broadband Investment, by John Windhausen, Jr.
• Local Government Infrastructure—The False Promise of Privatization, by Mildred Warner
• New Public Works in the Federal System—How to Get Results, by Max Sawicky
• Out of the Box: Thinking Differently about the Electric Grid, By Woodrow Clark

“Breaking Down Walls: Overcoming Institutional Barriers to Infrastructure Investment” is available on The Century Foundation Web site at www.tcf.org. Anthony Shorris is available for interviews regarding this report and other infrastructure issues. His bio is available here.