Highway Infrastructure and the Economy: Implications for Federal Policy, Howard J. Shatz, Karin E. Kitchens, Sandra Rosenbloom, Martin Wachs
“The U.S. government has at times premised investment in highway infrastructure on the belief that it contributes to economic growth. However, the economic effects of highway infrastructure remain a matter of debate. Politicians and policy analysts are today considering a major new U.S. transportation bill within an environment of shared concern about federal deficit reduction and reluctance to increase taxes. This monograph informs the debate by reviewing the literature on the effects of highway infrastructure on the economy and drawing conclusions from this evidence regarding the future federal role in highway policy. This review finds that highway infrastructure varies greatly in its economic effects, and these effects can be highly context-specific. The economic benefits and costs of highway investments can and often do spill over into jurisdictions different from those in which the infrastructure is located. Transportation networks are provided and renewed to link populations and economic activities that are separated by distance, so by its very nature, highway infrastructure is likely to bring benefits and costs to communities different from those in which it is located. However, because of the way highways are financed, projects that allocate differential benefits and costs over multiple political jurisdictions, such as across state lines, may have political difficulty achieving support. In light of this and constrained federal budgets, the federal government should concentrate its support on projects that produce a net economic gain across a wide geographic area or the nation as a whole, rather than on projects with limited or only local economic effects.”
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