Making impact in infrastructure

Governments build infrastructure. Well yes the private players get involved, and they might be the ones doing the actual construction, or they might even be the ones investing. Ultimately though, the government calls the shots, they approve the plans, they set the parameters and set up the policy environment which the projects operates in.

Governments measure themselves by socio-economic parameters. They should be focusing not on making money for the treasury (because there are wider externalities they care about which they won’t account for if they only think in terms of “returns” from an individual project), but on social level benefits and gains against social level costs. These quantifications are difficult; they probably require procurement of consultants’ assistance, and along the way, governments can get confused about the methodology, and hence the recommendations put forth.

So they might fall back on trying to get political value out of the projects. They’ll choose and work on projects that can capture people’s imagination, that can be repeated at the next couple of speeches or events. They might put too much weight on the anticipated political support or popularity of the project/idea.

Yet the fact is, if they want to make a genuine impact, and a positive difference to the system, they will need to do the hard work and possibly not take the credit. They need to think not what can they get out of it but what can they give to the people through it.