The Infrastructure "Crisis"--Posner

The August 1 collapse of a bridge that carries Interstate 35W across a river in Minneapolis, which killed 13 people, has led to loud calls for greater expenditure on maintenance of America's hundreds of thousands of bridges and millions of miles of interstate highways. The federal highway system--the "Interstates," like I 35W--has a total length of about 50,000 miles, and though that is only 1 percent of the total highway mileage in the United States, it carries almost a quarter of the nation's total road traffic, amounting to some trillion persons a year, and half its truck traffic. Concern with inadequate maintenance has focused on the federal highway system. It should be noted, however, that although the system is federal, its components--the individual interstate highways--are owned mostly by the states, with each state owning the portion of the federal highway system that falls within it. The system is financed in part by federal and state gasoline taxes, in part by the general federal budget, and, though most of the Interstates are freeways, in part by tolls levied by the states. The shock caused by the Minneapolis accident may seem excessive in light of these figures. A highway system that carries a trillion drivers and passengers a year is bound to experience occasional fatalities due to defects in highway design or maintenance as distinct from accidents due to driver negligence, vehicular defects, fog, and other conditions for which the highway system generally could not reasonably be thought responsible. Nor is it yet clear that the Minneapolis accident was due to deferred maintenance or other neglect. Current speculation is that it may have been due either to the installation of defective de-icing equipment or to the placement of construction materials used in a project to resurface the bridge's roadway. Although the accident may turn out to have had nothing to do with neglect of the transportation infrastructure (mainly highways, though of course there are local roads as well and some bridges are for railways rather than highways), there has been a long-standing, although until the Minneapolis accident a low-visibility, concern with what the concerned call "America's decaying physical infrastructure." What could this mean? A highway, like any other product, should be maintained at a level of quality at which marginal costs are equated to marginal benefits, including safety benefits. There is such a thing as making a product too safe. At the same time, there is a tendency to neglect the delay and wear-and-tear costs that are created by highways that have poor surfaces or that experience frequent lane closures due to the need to repair the road more often than if it were maintained properly. So the question is whether the nation is spending too little on highway maintenance as judged by a cost-benefit analysis along the lines just suggested with proper emphasis on delay costs and a realistic assessment of expected accident costs. The American Society of Civil Engineers has rated more than a quarter of the nation's bridges as "structurally deficient or functionally obsolete," and has called for an expenditure of $1.3 trillion to repair or replace them as well as to deal with similar problems of roads and other infrastructure. But an engineering optimum is not the same thing as an economic optimum. There is no indication that the ASCE has conducted a cost-benefit analysis of its proposal. Considering the infrequency with which bridges collapse, the idea that more than a quarter of them are "structurally deficient or functionally obsolete" in a sense relevant to serious concerns about safety is implausible. Not that it would be a surprise to find that the nation is spending less than the economically optimal amount on maintaining the highway system, bridges, and other infrastructure. Enormous recent growth in the total miles driven on the interstate system has not been matched by expansion of the system, resulting in a substantial increases in delay and also in wear and tear. The highway system has difficulty responding to a need for increased expenditures to preserve road quality and minimize delay because it is publicly owned, and is financed largely by taxes. Politicians have trouble raising taxes to pay for projects the benefits of which will largely be realized after the politicians' current term of office expires. Since accidents that are due to the collapse of a bridge or a highway segment, or some equally dramatic demonstration of a flaw in the highway system itself rather than a mistake by users, are rare, the likelihood of such an accident occurring within a politician's political time horizon is low. So there is an incentive to defer maintenance and thus live (slightly) dangerously rather than raise taxes, the effect of which will be felt by the taxpayer immediately. By the same token, rather than raise taxes to enable road repair or rebuilding that will avert any need for further maintenance for many years, politicians have an incentive to make frequent cheap repairs, even though the cumulative delay and accident costs (discounted to present value) may be great, rather than to take steps to reduce those delays and accidents after their term of office expires. Furthermore, while state taxes are paid by state residents, only part of the delay costs resulting from inadequate maintenance are borne by them because many users of the interstate highway system are nonresidents of the state that maintains its segment of the system poorly. In short, there are systemic reasons to expect the interstate highway system to be undermaintained, although there is also a reason to expect it to be overmaintained: the interest of road builders, like civil engineers, in overengineering the highway system in order to increase their revenues. Yet it is possible that they maximize their revenues by frequent small repair and rebuilding projects rather than infrequent but costlier because more extensive ones. My guess is that the interstate highway system is undermaintained, but it is just a guess, and I would be grateful if some of the readers of this post have better information on the question. Supposing that the maintenance of the system is not optimal, what might be done to bring it closer to the optimum? One possibility would be to privatize the system. Until the 1970s, it was believed that infrastructure services such as air transportation, rail and barge transportation, trucking, pipeline transportation, and even taxi service could be privately owned but had to be heavily regulated by government as "common carrier" services, with price and entry controlled by regulatory agencies. We now know better. Yet we treat highways, which are just another part of the transportation infrastructure along with airlines, railroads, and pipelines, as requiring not only tight regulation but public ownership. In fact limited-access highways are easily financed by user fees--tolls--and the advent of electronic toll collection (EZ Pass and similar services) has reduced, and will soon largely eliminate, the delay caused by having to stop and pay a toll. States have taken steps toward privatizing highways, including components of the interstate highway system, such as the Indiana Tollway. (See our posts of June 20, 2006.) If the interstate highway system were privatized, there would still be a need to ensure uniform safety standards, signage, and so forth, although the responsibility for achieving the requisite commonality could largely be delegated to the owners themselves, since it would be very much in their interest that the interstate system be from the user's standpoint uniform. There would be a potential problem of monopoly, since for many drivers there is no good alternative to using the interstate system. But that problem could be minimized by the terms on which states leased the operation of their stretches of the interstate system to private companies. Private operators who skimped on maintenance would be subject to being sued in tort if accidents resulted and to having their leases terminated; and to the extent that deferred maintenance caused unnecessary delays and thus reduced the value of the use of a highway, the operator would not be able to charge as high a toll, and so there would be a market penalty for suboptimal maintenance.

Comments

[Bill]

1. Nobody knows what happened to the bridge. If it were a maintenance issue, it would most likely have been fatigue failure in a gusset plate, the things that connect the bracing members of steel structures. An accepted crack management method is to drill a hole at the tip of the crack, weakening the bridge by a known amount but stopping the crack propagation.
2. Bridges usually fail under heavy loading, wind events, collisions, or earthquakes. It is unusual, but still possible, that the failure would occur on a quiet evening with light loading. You can make a paper clip fail by fatigue by bending it back and forth. It may fail with a final small twist. Reports are that only two lanes of the bridge were being used and it looks like there were only a few trucks. Bridges are designed to be filled with bouncing concrete trucks.
3. People will know what happened to the bridge once the steel is raised from the bottom of the river. If fatigue was the problem, investigators will find a fully propagated crack. They might also find something else like a cut structural member or induced corrosion of some fasteners.
4. NTSB Chairman Mark Rosenker is an irresponsible blowhard. He has pointed a finger at Progressive Contractors, Inc. for storing ‘tens of thousands’ of pounds of construction materials on the bridge deck, the weight of which would have been factored into the design of the improvements. Nice try Mark, but a single semi-truck weighs eighty-thousand pounds sitting still, with a much higher dynamic loading, and the bridge is designed to handle hundreds of them. Progressive Contractors, Inc. will soon be out of business thanks to his comment.
5. Rosenker’s team has ‘identified a design problem with the gusset plates’. This design problem is of interest to me and the traveling public who travels on bridges. When I contacted the NTSB about gusset plate specifics, I was referred to television news.
6. Anybody remember this from less than a year earlier?

12AUG06
Tuscola County prosecutors filed terrorism-related charges Saturday against three men who they say bought dozens of cell phones Friday in Caro in a globally coordinated plot involving the Mackinac Bridge.
They charged brothers Adham Abdelhamid Othman, 21, and Louai Abdelhamied Othman, 23, along with their cousin, Maruan Awad Muhareb, 18, with identical counts of collecting material to support terrorist acts and surveillance of a vulnerable target with intent to commit terrorism.

7. Again, nobody knows what happened. But to blame an innocent contractor, and then a dead bridge designer, while completely silencing the existence of an international plot to take down a nearby bridge less than a year earlier, before anybody knows anything is, in my opinion, questionable.
8. In any case, what an opportunity to bump gas taxes by $0.05 a gallon, raising $40 billion to distribute to civil servants and government contractors for starters. Why wait to find out what happened?

[Wha?]

Nearby bridge? Two states away?

[Bill]

Comment relative to the West Coast. Substitute: "Upper Midwest".

[ChinaCoalWatch]

Should I pity the poor NTSB receptionist who gets Bill on the line asking for gusset plate specifics?

I think Judge Posner's best point in this post was to demonstrate precisely how infrequent these events actually are, and how implausible the ASCE's assessment (or how improper their evocative word choice) is when compared to what a normal person considers to be truly serious. In the end, the public's perceptions become severely displaced from reality.

I believe the manifestation of "shock" and "crisis" with regard to the condition of our infrastructure is part of a larger phenomenon in American popular culture where arguable "local freak accidents" are turned into their own media circus and overreported nationally for weeks. Similar impression-distorting coverage also surrounds reporting of intense weather, violent crime, disappearance of children, aircraft crashes, and mine incidents.

The one analyst (or advocate) in a thousand who said the sky was going to fall is summoned after the fact to generate an impression of the invisible widespread rot in the foundations of our entire system, and the negligence of corporate and government officials who, "on notice" recklessly decided to do nothing. People exclaim over the water cooler that "I had no idea how bad it was" and "Those bastards should pay", without realizing that the reason they had no idea was because no one seriously considered the existence of a "crisis waiting to happen" until after the accident occurred.

Finally, since this is a bridge post - attention should be paid to the Pont Du Gard which, constructed without mortar, neglected for fifteen centuries, and actively cannibalized by locals for stone, has nevertheless been standing for almost two thousand years. True, the Gardon is not the Mississippi, and the climate of Nimes is much more moderate than Minneapolis, but it's still a testament to the ages of the genius of Roman engineers.

[William Bruntrager]

As someone who generally opposes government regulation, I'm curious to see the evidence behind the conclusion that "[w]e now know better," than to believe in heavy regulation of what you call "common carrier" services. Is this claim based on specific research, or just a general "rule of thumb" conclusion from experience compiled in the last thirty years?

[Ken Ballard]

This problem causes me to wonder: What would the great regulator/economist Alfred E. Kahn do? Of course, since I am not an economist, you would be better able to guess at this than I. But I tend to think that the current system would offend him as a believer in marginal cost based economics. As an economist, the term "freeway" probably seems ridiculous. Nothing is free. Taxpayers who drive less are subsidizing taxpayers who drive more just as air travelers of popular routes used to subsidize air travelers of under-travelled routes back before airline deregulation. Tools like EZ Pass make toll roads easier in practice. People ought to pay for what they use.

Kahn said that people should pay for use at the margin, power usage should cost more at peak hours. In this way, the consumer is sent signals and demand can be shaped. I don't know if any toll roads do this currently, but I think that this would help what seem like suboptimal load factors on a lot of highways. A "freeway" seems to send consumers the wrong signal. And it doesn't seem like we can leverage any kind of economy of scale by continuously laying more highways. More highways just seem to add greater and greater negative externalities.

In closing, I apologize for my dilletante's understanding of economics and Alfred E. Kahn.

[Andrew]

I think approximatly eighty percent of the backlash regarding the collapsed bridge is really displaced anger about the war in Iraq. Many taxpayers, myself included, are fed up with watching their hard earned tax dollars get thrown into that black hole. So it is espeicially frusterating when we see concrete examples (no pun intended...) of legitimate government functions being neglected.

Furthermore, because the Bush Administration has developed a reputation for placing incompetant, inexperianced partisan hacks in key posisitions, any time a serious accident like this occurs, suspicion arises. To put it another way, the American people no longer trust the Bush Administration. (As an American citizen, I feel like a passenger in a car being driven by a drunk driver--I'm not in control, and I don't trust the person who is.)

[DanC]

If the interstate highway system were privatized the highway privatized maybe well run but what happens to the total transportation network. For example, Ohio tried to raise tolls for trucks on the toll road led to increased traffic on Route 30. Large sections of route 30 remain one lane going in each direction. When you place numerous semis on route 30 serious accidents increase. The State of Ohio responded by adjusting tolls. If the toll road was private, the owners have less interest in the entire road system. The negative externality could, in some places, be substantial.

Still, I must admit that I have never understood the politics of road construction. LA quickly built new roads in an emergency (by ignoring the political spoils that are a part of most road construction.)

I wish I understood why road construction and repair is so slow and expensive. Why competition seems so absent and why I should think that a privatized road system would be immune to the political spoils system.

[Peter]

The idea of privatizing the interstate highway system is interesting, but would there be enough of a profit margin for potential owners to be interested? The other aspects of transportation infrastructure mentioned (train, trucking, taxi, etc) all have some per-user fee associated with them, though I don't know enough about pipelines to say for sure. The few instances I know of where privatization was carried out was of toll roads (the Chicago Skyway, for instance). I don't think I'd want to see the entire federal interstate system become toll roads.

[Bama 1L]

If you haven't already, you may want to look at how French autoroutes are operated. They were constructed by private companies to government specifications. They are state-owned but operated by concessionaire companies, which themselves I think must have government minority ownership. Revenue mostly comes from user tolls--and they are quite steep compared to what Americans are used to! I think the concessionaires also get to make contracts with with rest stop businesses. In turn, the concessionaires maintain the roads and manage traffic flow.

I think this is what you're suggesting, except that some of the commonalities you would leave up to the market are imposed by governmental regulation. Frankly, I don't see why you wouldn't just require your interstate operators to use the same signage as on the, presumably still publicly owned and operated, other road systems.

[Bama 1L]

Privately-operated highways are alive and well in France. Judge Posner's suggested plan closely resembles the French autoroute system.

I don't think it can be introduced here, though. The political will to replace the current system of funding roads through invisible gas taxes with high tolls simply does not exist. Highways that are free or nearly so are regarded by Americans as a birthright, I'm afraid.

The French autoroutes, by contrast, have pretty much always worked as they do now.

[Neil Schickner]

In big picture terms, the age profile of the transportation infrastructure explains a lot about the current situation. The nation's highways and bridges were built in two phases: (1) in the 1920s and 30s and (2)in the 1950s and 60s. Highways and bridges have a useful life of approximately 80 years provided they undergo a major rehab at mid-life. Going into this decade, all the structures built in the 1920s and 30s are reaching the end of their useful life while all the structures built in the 1950s and 60s are hitting middle age when they need a major rehab. Life cycle maintenance costs of highways and bridges are inherently lumpy and because the system was not built incrementally, all the "lumps" are hitting and piling up at the same time. This is what makes 2007 different from 1997 or 1987.

[Neil Schickner]

In big picture terms, the age profile of the transportation infrastructure explains a lot about the current situation. The nation's highways and bridges were built in two phases: (1) in the 1920s and 30s and (2)in the 1950s and 60s. Highways and bridges have a useful life of approximately 80 years provided they undergo a major rehab at mid-life. Going into this decade, all the structures built in the 1920s and 30s are reaching the end of their useful life while all the structures built in the 1950s and 60s are hitting middle age when they need a major rehab. Life cycle maintenance costs of highways and bridges are inherently lumpy and because the system was not built incrementally, all the "lumps" are hitting and piling up at the same time. This is what makes 2007 different from 1997 or 1987.

[Matthew Dixon]

I do not see how the users of a private highway could recapture the full value of their use of the highway to the third party beneficiaries of that use; for example, the consumers of the goods and services the delivery of which is made possible, or at least more efficient, by the highway system. The highway users will only be able to raise the prices of their goods and services so high to recover the costs of private highway access before they are unable to compete with local providers or providers able to make efficient use of alternate public roadways. If the users of the private highway cannot recapture the full value of their use of the highway, the owner of the private highway will not be able to obtain the full value of the use of the highway from the users of the highway by charging a toll for its use. I will pay for the privilege of using a private highway to the extent that the cost of access is less than the benefit that I receive from the use of the highway, but to the extent that others benefit from my use of the highway and I am unable to recoup that benefit from them I will refuse to pay for the privilege of using the private highway even though the cost of access is less that the overall benefit to society that would result from my using the highway.

I can see that such private highways may be profitable over relatively short distances in highly trafficked areas (under such circumstances the costs of operation and maintenance other than for wear and tear caused by usage are lowest and the expense can be divided among many users), at least if profit is considered as any sums obtained in excess of operating and maintenance costs, but the externalities appear too great for privatization to work in areas where alternate routes are not highly congested or where relatively few vehicles are required to pay for long stretches of roadway (under such circumstances the cost for operation and maintenance other than for wear and tear caused by usage are highest and the expense must be borne by few users). But privatization of this kind still does not address the need for capital reinvestment as such privatization is simply a grant of a concession to a private company that agrees to assume operating and maintenance costs of a public asset to charge for use of the asset by the public. The duty to maintain an existing bridge does not include the duty to rebuild or replace an antiquated or dilapidated bridge that has exceeded its operational lifespan.

[Tony Zirkle]

I'd like to hear an expert scientist study if and how a jack hammer can collapse a bridge. In the military, we were ordered to break beat in running across bridges because of the possibility of collapsing a brige with just 36 individuals.

Tony Zirkel
www.IndianapolisCriminalDefense.com
www.Divorce-Indiana.com
www.Indianapolis-Criminal-Family-Injury-Lawyers-Attorney-TonyZirkle.com

[DP]

Privatization does appear to be a viable idea at least in some situations. However I doubt that many of the less traveled highways / bridges would find a private sector buyer. Who would be interested in purchasing an 90 year old bridge and the liability that would come with it?

As for the skyway, it does disturb me that chicago is selling off tax revenue considering the current mass transporation budget crunch. The better question would be why was this deal considered a steal for the purchaser? Should the discussion be more about how to improve efficiency in the public sector than ways to shift the burden to the private sector?

[Hausexperte]

That is a very interesting view. As someone from a foreign country it is great to get another view of the bridge collapse and the problem behind like the short message in our media. I doubt privatisation would be a good solution. We discuss the same thing for our rail system in germany and if we look over to great Britain there it has been pretty wrong to privatizze the railsystem. Personally i think to raise taxes for the streets would be mor ewise if its clear that the money really goes into highway projects and not somewhere else.

[Guil]

"There would be a potential problem of monopoly, since for many drivers there is no good alternative to using the interstate system. But that problem could be minimized by the terms on which states leased the operation of their stretches of the interstate system to private companies."

So do we really "know better" than the price and entry controls of the 1970s?

It seems to me that if Mister Posner is to suggest privatisation of the highway system, and especially if he points out that we have extirpated oursleves out of an era in which our reflex would be to use price and entry controls in such a situation, he has to specify what kind of monopoly policy would do.

[DanC]

Sorry, my earlier post was poorly written.

If a stretch of highway is privatized that section may be well run but what happens to the total transportation network.

For example, Ohio raised tolls for trucks on the Ohio Turnpike which led to increased traffic on Route 30. Large sections of route 30 remain one lane going in each direction. When you place numerous semis on route 30 serious accidents increase. The State of Ohio responded by re-adjusting tolls. If the toll road was private, the owners would have less interest in the optimal operation of the entire road system. The negative externality could, in some places, be substantial.

Still, I must admit that I have never understood the politics of road construction. LA quickly built new roads in an emergency (by ignoring the political spoils that are a part of most road construction.)

I wish I understood why road construction and repair is so slow and expensive. Why competition seems so absent and why I should think that a privatized road system would be immune to the political spoils system.

[Volkswagen Skid Plate Front]

an expert scientist can understand that.

[Jim Leitzel]

Adam Smith, in the Wealth of Nations (Book V, Chapter 1, Of the Expences of the Sovereign or Commonwealth, in paragraph 78):

"The tolls for the maintenance of a high road cannot with any safety be made the property of private persons. A high road, though entirely neglected, does not become altogether impassable, though a canal does. The proprietors of the tolls upon a high road, therefore, might neglect altogether the repair of the road, and yet continue to levy very nearly the same tolls. It is proper, therefore, that the tolls for the maintenance of such a work should be put under the management of commissioners or trustees."

[Anonymous]

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