Edward Glaeser questions the idea of massive federal spending on infrastructure.

While infrastructure investment is often needed when cities or regions are already expanding, too often it goes to declining areas that don’t require it and winds up having little long-term economic benefit. As for fighting recessions, which require rapid response, it’s dauntingly hard in today’s regulatory environment to get infrastructure projects under way quickly and wisely. Centralized federal tax funding of these projects makes inefficiencies and waste even likelier, as Washington, driven by political calculations, gives the green light to bridges to nowhere, ill-considered high-speed rail projects, and other boondoggles. America needs an infrastructure renaissance, but we won’t get it by the federal government simply writing big checks. A far better model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.

I get the argument that investing without a plan leads to waste. We don’t really have any real planning at the federal level. I think it would help for the federal government to set a vision and direction for what the smart infrastructure of the future should look like, and not just transportation (public, private and human muscle-powered) but energy, water, communications, freight, manufacturing, housing and even green infrastructure. One of the problems with local authorities and companies doing the planning is that they focus on only one of these things at a time, so they miss out on potential synergies and opportunities for hybrid infrastructure. An example might be highway corridors that serve as rights of way for high speed rail, high-voltage lines, pipelines and movement corridors for wildlife. Another might be a system of parks that move water resources, improve water and air quality, absorb floodwaters, counteract climate change, provide habitat and improve peoples’ health.

He is right though that a lot of planning needs to be at the metropolitan area scale and incorporate hard-nosed cost-benefit analysis. This is already done to a certain extent by designated “metropolitan planning organizations”, but this only applies to transportation. It could be more comprehensive. I also see a middle ground between pure local funding and pure federal funding. Federal funds can be targeted only to projects that are in line with the national vision and the local comprehensive plan. They could be low- or no-interest loans rather than outright grants. They could be grants but require local matching funds and encourage private investment. They could be loans that are partially forgiven if the projects meet performance and cost-effectiveness criteria.

Having both federal and local plans ready to go, along with a federal infrastructure bank able to issue bonds, would also mean the country could really take advantage of periods of unemployment and low interest rates both to stimulate the economy in the short run and boost productivity and prosperity in the long run.