Infrastructure Investment

East lansing high school

Author: Hunter Kulka

Economics are a fundamental building block of a city. A good economy can be the difference between a bad and great city. There are a lot of economic factors that are visible in a city. Infrastructure is one of the most important and visible factors of a healthy economy. A city has a lot of power to influence the local economy in many ways. Infrastructure planning and investment is a very important job of the city and it can have a great effect on the local economy. In order to do this effectively a city must use all of the tools at its disposal. Investment can and should be done by both the public and private sectors.

Infrastructure covers a large variety of resources that are fundamental for the economy of a city. It includes; roads, bridges, utility services (power grids, water supply, etc.), and buildings. Roads and the traffic system are extremely important for the public sector to invest in. Roads that aren’t maintained properly, like most roads in Michigan, are a hazard for drivers and can cause damage to their vehicles. However, it’s not just investment into the physical roads that is important, traffic patterns need to be studied and the signals must be altered accordingly. Civil engineers employed by the city can improve the flow of the traffic, and benefit the city.

Some infrastructure investment benefits can go completely unseen to the public, but it is important to not ignore these investments because they can occasionally cause harm if not fixed. For example, the development of a new water treatment plant may go unnoticed by the public if it is invested in, but could cause drastic harm to the public if the city ignores the current treatment plant that is failing. We saw the lack of investment in infrastructure hurt the people and the city of Flint, MI, by trying to save money the city switched water sources to the Flint River which had high levels of bacteria and lead in it. This lack of investment hurt the economy drastically, not only will it cost the city of Flint an estimated 400 million, but they will also lose residents and businesses that once called the city home.

Private sector investment can be quicker and more cost effective than public investment. Public-Private-Partnership investment in infrastructure is something that is becoming more and more popular in the United States. In this partnership, the city would contract a private company to maintain or develop infrastructure for the city. This benefits both the public and private sectors because the city gets the investment done without having to do the work and the private sector gets to profit from the work that it has done. Schools are one form of infrastructure that are developed through a public-private-partnership. Schools serve as a place to educate the children of a community, as well as serve as a place for community meeting needs; such as voting polls, and places to hold events. In Pembroke Pines, Florida, a partnership was established between the city and a private developer to build a primary school. The construction cost the private developer between 22 and 34 percent less than other schools built by the state during the same period. The savings that this creates allows for greater infrastructure investments in other places.

It is hard to say what type of investment in infrastructure is better; public or private investment. Both types bring significant benefits to the city and the people living there. I believe that the best investment strategy is to have a mix of both types of investment. The city can influence the local economy in a couple of ways and the largest of those is through infrastructure investment. New infrastructure can not only generate profit but it can also improve the quality of living and attract new residents. Without a strong economy, it is nearly impossible to have a good city, and without investment in infrastructure, it is hard to have a strong economy.

An example of this principle at work: PPP Schools