Questions on roads being considered a public or private good

Questions

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I remember reading this somewhere: “America has good roads not because it is rich but America is rich because it has good roads”. Although that might be a bit of a stretch but it largely underlines the importance of an efficient road network for a nation’s economy.

“One third of the value of Indian fruits and vegetables ends up destroyed or spoiled on the way to market, mostly because of bad infrastructure, most of all bad roads.” [via]

Talk about wasting resources. As a libertarian would argue, would privatizing the road network make it more efficient? Or is it too much of a public good?

Alternatively, registration and car tax is pathetic in India. Is it an untapped resource? Would raising these taxes lead to better roads or should we simply hold contractors to higher post-construction standards? As I understand, there are clauses for post-construction assessment after a certain period of time but the specter of corruption has made such clauses useless. Apart from the usual “eradicate corruption” solution, do you have any feasible answers to mitigate if not eradicate the problem of bad roads?

“Questions” [Short URL: http://www.ipatrix.com/?p=1439] was published Thursday, June 8th, 2006 at 4:45 pm by Patrix, filed under Governance, and tagged as Governance. Both comments and linkbacks are closed.

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http://www.aadisht.net Aadisht Khanna
Patrix,
Even if you see roads as too much of a public good, that doesn’t prevent them from being privatised. If your concern is to ensure that everyone has access to the road, you can provide a subsidy in the form of a road-use voucher/ pass to the consumers.
That still doesn’t resolve the question of whether privatising roads will lead to more efficient roads in the absence of competition.
http://www.walkamusing.blogspot.com/ Anu
There is an old chinese saying: “If you want to get rich, build roads”. And the chinese have taken that really seriously. Seems to help. Just came across this. You may find it interesting: http://www.newkerala.com/news3.php?action=fullnews&id=1851
Ankita
Check out the Economist’s “A survey of Business In India” dated June 3rd . Morgan Stanley: “The single greatest macro-constraint on the indian economy, holding back its avergae growth”, is its low spending on infrastructure.”
This is particularly prohibitive to labour-intensive industry, wherein lies our comparitive advantage due to an inexpensive skilled workforce. Infrastructure needs to be drastically improved if India wants to be where China is in 15 years. Note: We currently spend about 1/3 of what China does on infrastructure per year.
I agree with Adisht Khanna, we need to build roads that are accessible to all people, but this doesnt mean that te government is the best man for the job. We know privatisation (more so in the midst of competition) leads to efficiency – so why not contract out ?
http://ipatrix.com Patrix
Aadisht, my only concern for calling roads a public good was the minimum right to access. Of course, toll roads exists but only when an ‘inefficient’ alternative exists. Then, there is the question of effect of privatization for roads and as you say, it may not necessarily solve problems. So what might be a potential solution?
Anu, thanks for that link. China has certainly stepped on its infrastructure building. But then they are a authoritarian regime and its ways of doing so may not be possible in India.
Ankita, I agree with the Economist’s survey. The Golden Quadilaternal project may be trying to rectify that problem but I hope other infrastructure like power, water, and housing are also paid attention to.
Contracting out will not solve everything. In fact, road building is currently contracted out in India. It is the post-construction evaluation that concerns me. Rampant corruption just doesn’t allow it.
http://www.retributions.wordpress.com confused
Pat,
Roads make people rich. There is no doubt about that.
I am not so sure about the private/public sector input. The only problem might be that the private sector will not build roads in areas which are not financially renumerative as of now. That does not mean that they wont be in the future…
http://ipatrix.com Patrix
Confused, I would put that as access to roads make people rich. Most of the sprawl in American cities is subsidized by government’s role in constructing roads to these far out place. With the exception of Florida, I think private parties wouldn’t be too keen on laying out infrastructure if they were to pay for it. Think about it, it could greatly reduce sprawl and encourage public transit.
http://www.retributions.wordpress.com confused
Pat,
I concede you have a point but I am not sure I would be very fond of living in a city. Suburbs are such an integral part of American society that I would be loath to mess with it.
Second, at least in NJ, if you want to go to the two big cities in this region, NewYork and Philadelphia, there is plenty of public transport available.
I know as a fact Texas is different, maybe becuase its too large?

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