American Construction Costs and National Stereotypes

I’ve spoken my piece about why American infrastructure construction is so expensive. This is very much a work-in-progress, but it represents about the extent of my current knowledge on the subject. I want to follow up on this by talking about stereotypes and how they affect what people believe is possible when it comes to construction costs. I wrote about this to some extent here, 4.5 years ago, noting that my impression is that people on the Internet are far more willing to believe that there is efficient construction in Northern Europe than in Southern Europe even though the latter actually has lower construction costs.

Here I want to delve somewhat deeper into what stereotypes I’ve seen and how they lead people astray when it comes to infrastructure. It’s a lot more than just Southern and Northern Europe. Each of the following sections describes an aspect of infrastructure planning that doesn’t conform to American stereotypes.

The US has weak property rights

Americans are taught from a young age that America is about freedom. They’re taught about the American struggle against British tyranny, about the life-liberty-property triad, and about all manners of national origin stories that get extended to a ridiculous extent. The result is that Americans and even some immigrants who made it big in America and absorbed American ideas readily believe that they are the freest nation in the world in all ways. Faced with the reality that (for example) Germany has far stronger privacy protections, the reaction is either indifference (among most people in the US) or an attempt to castigate privacy as actually a weird imposition (among some tech boosters).

The same issue occurs with property rights. Objectively speaking, American law does not have strong protections for property rights. Japan has stronger individual protections in property rights. In addition to strong legal protections, there are strong extralegal protections in countries that have some tolerance of street protests; France is famously such a country, at least if the protesters are white, but Japan had airport riots delaying the construction of Narita and earlier riots blocking the expansion of an American military base.

In contrast to these cases, in the US, when the state wants your property, it will get it. Lawsuits can cause delays but not stop a project the state is committed to. Moreover, the state is allowed to time the market. The only thing the government is not allowed to do is excess takings – that is, taking more property than needed to build infrastructure in order to sell it at a profit later. If your property has low value due to past government activity, the government does not need to pay you extra. As mentioned in The Big Roads, the United States built the Interstates through redlined black inner-city neighborhoods because land there was cheaper; after the race riots of the 1960s Washington-area road builders even wanted to build a new round of roads since land would be especially cheap, and they were stopped only by political opposition to such optics rather than by any legal or extralegal challenge.

NIMBYism in the US in the context of infrastructure has to be understood as not a reaction to a state that is too weak but to one that is too strong. The denizens of rich suburbs like the sundown town Darien, Connecticut rely on the state to prop up their property values through exclusion, and any change that threatens such exclusion may cause losses that they have no way to recover. Lacking any way to legally prevent the state from slicing through the town to build faster roads and trains, they have to use political influence to prevent infrastructure from being built.

The US does not have safe railway operations

I made a post eight years ago scrubbing lists of rail accidents from Wikipedia and comparing the US, the EU, Japan, China, and India. I don’t believe the numbers are true for India or China as not everything may be reported in English sources, although I do believe they’re true for Chinese high-speed rail; but for Japan, the EU, and the US, the numbers are solid. American trains are several times less safe for passengers than European ones, and more than a full order of magnitude less safe than Japanese ones.

The US in theory has a culture of safety-first, but in reality it’s more safety theater than safety. Rail signaling is primitive, and automatic train protection (“positive train control,” or PTC) is not required in terminal zones with restricted speed, leading to fatal crashes. The favorite way to deal with danger is to slap an arbitrary speed limit – for example, to permit trains to use a bridge that has just been burned down but at restricted speed, with exactly the result you’d expect.

This is difficult for Americans to believe, especially with respect to Asia. I’ve repeatedly seen people insist that Japan does not prioritize safety, and the idea that China does not seems universal in the developed world. Richard Mlynarik’s report of a Caltrain official who, when told Japan turns trains faster than the official thought was possible, responded “Asians don’t value life the way we do,” seems par for the course when it comes to Western attitudes. Westerners are certain that Asians are not fully human but are part machine, with no individuality, perhaps thinking that since Westerners can’t tell East Asians apart East Asians can’t tell one another apart either.

China is not particularly efficient

The epitome of the American stereotype of dangerous tyrannical efficiency today is China. Ray Lahood, Obama’s first-term secretary of transportation, even mentioned that in connection with high-speed rail. In reality, Chinese infrastructure construction costs do not seem especially low. Not much information makes it to English-language media, and unlike in French or German I don’t know how to look up construction costs in Chinese, but the lines for which I can find data seem to be in line with the global average. Metro Report has an article mentioning two Shanghai Metro extensions: the all-underground Line 9 extension at $225 million per km, and the 46% underground Line 17 at $123 million per km, with very wide stop spacing.

Moreover, high-speed rail in China is on the expensive side. There are studies asserting that it isn’t, but they do not control for PPP. The Beijing-Shanghai high-speed line cost 218 million yuan, or about $55 billion adjusted for PPP, making it about $42 million per km, a high figure for a line with almost no tunnels (only 1.2% of the line’s length).

The other famously efficient East Asian dictatorship, Singapore, has high infrastructure costs as well, judging by what’s going on with the Thomson MRT Line.

Americans fixate on China because it’s so big and because they consider it a rival. But there is no reason to expect the best results to come from a large country. Most countries are small, so we should expect both the most successful and the least successful ones to be small. The actually cheap places to build infrastructure in, like Spain and South Korea, don’t really pattern-match to any American or European self-perception, so it’s much easier to ignore them than to look at Chinese or German efficiency.

Corruption does not work the same way everywhere

The United States has a fair amount of political corruption, but it’s not exceptional for this in the developed world. There’s widespread American belief that the public sector is incompetent, and Americans who have compared American and generic first-world public projects correctly think this is especially true of the American public sector, but this is not exactly about corruption. My quip on the subject is that Italy has low construction costs – and Italy’s high corruption levels are no mere stereotype, but are mirrored in Transparency International’s Corruption Perceptions Index. Moreover, low costs and high corruption perceptions seem endemic to Southern Europe and South Korea.

I’m not familiar with the precise nature of corruption everywhere. But what I’ve read from Italy and Greece suggests that it’s different from what happens in the United States. In diagnosing Italy’s stagnation over the last generation, Bruno Pellegrino and Luigi Zingales note that Italy has a widespread problem of tax avoidance, leading private companies to mostly hire within extended clans rather than by merit; the reason for the recent stagnation, they posit, is that the computer revolution has made hiring by merit especially important. In Greece the same problem of tax avoidance is endemic – see some links through Wikipedia – and Stathis Kalyvas’s paper about clientelism and political populism notes that Greece does not really have large prestigious private businesses with workers vs. bosses politics the way the US, Japan, South Korea, and the European core do.

In Southern Europe, or at least in Greece and Italy, it looks like corruption is endemic to the private sector. The public sector is affected by clientelism, but perhaps infrastructure construction is so removed from politics that there is no unusual corruption there, and thus engineers can innovate their way into lower costs, as postwar Milan did. If the public sector in Italy is as efficient in Germany, it will have lower costs than Germany simply because market wages in Italy are lower thanks to the private sector’s low productivity. This is not a complete story, since it specifically predicts that Italy should have a growing construction cost gap with Germany as their wages diverge, whereas at least based on the smattering of projects I’ve seen Italy was cheaper even in the 1990s and early 2000s, when wages were similar in both countries. Moreover, Scandinavia has low corruption, high wages, and low construction costs. But this is suggestive of how come countries with wages on the margin of the first world tend to consistently have lower construction costs.

The nature of American corruption is different. The private sector has little of it. Tax avoidance exists in the US, but not to the same extent as in Italy or Greece. Managerial fraud at big business exists, but is nowhere near the levels of Mediterranean small businesses. Instead, the public sector is inefficient, due to different problems – not quite clientelism, which describes party loyalty as a condition of hiring, but hiring based on personal loyalty to the governor or mayor. What’s more, since the problem goes all the way to the top, expecting the same authoritarian state and municipal officials to successfully privatize infrastructure to unleash private-sector productivity is fruitless.

The bureaucratic state can guarantee fairer outcomes than litigation

When writing my post about the causes of high American construction costs, I read different takes on the American tradition of adversarial legalism. A paper by Shep Melnick, which I linked in my post, asserts that adversarial legalism is good for various oppressed minorities, focusing on lawsuits forcing better accessibility for people with disabilities, looking at special education as an example.

And yet, if we look at the usual liberal standard of fair outcomes rather than fair processes, the outcomes in the United States do not seem especially fair. Workplace discrimination levels against nonwhites range widely between countries as well as between different studies in the same country, but the US seems to be roughly within the European median; there is a large set of references in the OECD’s International Migration Outlook of 2013, PDF-pp. 11-12, as well as a smaller list in the OECD’s The Price of Prejudice, p. 16. The latter source also compares international gender gaps, and the US seems fairly average as well. Only in the employment gap between second-generation immigrants and children of natives does the US do especially well, and that’s in the context of an unusually high-skill mix of immigrants, like similar high performers Canada and Switzerland, neither of which has an especially low discrimination level in equal resume studies.

When it comes to Melnick’s question of disability rights, the US is increasingly falling behind thanks to high construction costs. Berlin is about to complete installing elevators at all U-Bahn stations, aided by a process that allows it to make a station accessible for 2 million. Madrid, where this cost is about €5 million per line served by each station, has a large majority of accessible stations already and is looking at full installation next decade. Compare this with the tardiness of New York, where layers of consent decrees and grandfather clauses have created a subway system that is about as old as Berlin’s and only 25% accessible.

Incuriosity affects all American groups

I literally just saw a comment on Reddit that tried to slot the idea that the US should learn from the rest of the world into political liberalism or Democratic partisanship (“blue tribe”). This is not an idiosyncratic connection. In 2006, at Yearly Kos, a performer used the expression “French-loving” as a self-description for American liberals, and the entire audience said “preach on” in agreement; this and similar epithets hurled by conservatives in the same era may have been a unique artifact of France’s opposition to the Iraq War, but years later Republicans would keep complaining that Democrats want the US to imitate European welfare states.

The reality is very different. American indifference to rest-of-world practice is national. So is English Canadian indifference to rest-of-world practice excluding the US and occasionally Britain. If anything, New York is even more solipsistic than the rest of the US. I’ve recurrently seen New Yorkers use the same dismissive language that Americans use for the world outside their country for anything outside the city. In contrast, Bostonians do try to look at how things work in the rest of the US and the same is true of people in Sunbelt cities that build light rail.

The upshot of this is that there is not much to look for in intra-American politics. The institutions of American partisanship are not useful for this. Some good ideas can come from people who happen to identify with a party, but the distance between the legal scholars criticizing adversarial legalism and the practice of tort reform, like that between the recommendations of academic environmentalists and the practice of green jobs programs, is vast.

Moreover, the elite centrist politics that claims to be above partisanship has to be seen as yet another partisan institution, working hard to limit the scope of debate to what the same elites that have failed to provide good government services will find comfortable. The same can be said for populism. There is nothing to look for on the populist left and right, because as movements they are not concerned with governing, and tend to boost voices that are long on rhetoric and short on knowledge. Alexandria Ocasio-Cortez does not need to be correct for leftists to admire her, for one since the veto points on implementation details are members of Congress well to her right; why should she make an effort to educate herself about fuel taxes or about the white supremacy of the Gilets Jaunes? And the less said about ideological experiments like Walker-era Wisconsin or Brownback-era Kansas, the better.

Ultimately, not everyone has the same stereotypes

I focus on American stereotypes, and to some extent pan-Western ones, because stereotypes differ by culture. Americans self-perceive as risk-taking and entrepreneurial. Israelis perceive Americans as hopelessly square and rulebound, even in comparison with Europeans. Westerners perceive all East Asians as rulebound and machine-like. Chinese and Malay people self-perceive as dog-eat-dog societies, at least in Southeast Asia, to the point that when I learned Mahatir Mohamed’s criticism of human rights in Asia in university, I learned his take as “we Asians don’t naturally cooperate and require an authoritarian government” rather than as the more typically Western belief that Asians are naturally obedient.

The incredulity I’ve encountered when trying to tell Americans how Israelis and Singaporeans perceive things is not just a matter of American solipsism. I’ve seen similar incredulity on this side of the Pond, for example when I told Spanish mathematicians, who are not railfans, that Spain has really low construction costs; they found it hard to believe, due to the widely-shared stereotype of Southern European corruption. By their nature, stereotypes appeal to base instincts, working through unexamined prejudices. Not for nothing, the people most invested in stereotypes, the racists, tend to be the most closed, to the point that openness to experience as a personality trait is almost a proxy for antiracist politics.

Neither widely-shared stereotypes (Japanese order, Southern European corruption, etc.) nor more internationally variable ones are enlightening when it comes to actual differences in infrastructure construction costs. The importance of international variability is that Westerners who are closed to the fact that how Asians perceive themselves is different from how Westerners perceive them are likely to be equally closed to a thousand details of governance, business, and engineering between successful and failed infrastructure programs.

The most importance difference in stereotypes when it comes to infrastructure is how Americans perceive the difference between Europe and the US and how Europeans perceive it. The US is certain it’s at the top of the world, so if there’s an aspect on which it isn’t, like life expectancy or public transit, then this aspect probably doesn’t matter much and the American entrepreneurial spirit will soon fix it anyway. Few people in the core European countries share this attitude. Americans need to choose between a sense of national pride and improving their infrastructure; for all the glory infrastructure can give, the methods with which they need to build it require letting go of their prejudices against the rest of the world.

21 comments

  1. Herbert

    A very enlightening element is the average reason to the sentence “our country is the only country that…”

    In the U.S. the faction will be chest thumping nationalism. In Germany it’ll likely be shameful “oh my god, why can’t we be normal like everybody else?”

    • Ross Bleakney

      That’s because Germans, by and large, are well aware that they have done some terrible things as a nation. Even the British — when push come to shove — have to admit that their empire was rather brutal. Meanwhile, Southerners often ignore the reason why the Confederacy was created (to ensure that Texas, as she put it, could continue “maintaining and protecting the institution known as negro slavery — the servitude of the African to the white race within her limits”). Most Americans seem oblivious to past oppression, such as our involvement in the Philippine-American war.

      Or maybe it is because sometimes we are exceptional in a good way. Only a dozen people have walked on the moon, and they have all been Americans. The U. S. also invented the Internet, the World Wide Web, and much of the technology that makes it all worthwhile. We are used to being trendsetters, so when we actually lag everyone (like we do with our inability to use the metric system) we just shrug and consider it a cute anomaly, rather than a weakness.

      • Alon Levy

        I fucking wish the Brits admitted their empire was brutal. The Tories openly defend it in ways Americans are too embarrassed to defend the Confederacy, and the non-Tories just don’t talk about it. It’s like how few people in France openly admit that the nation collectively, willfully, and enthusiastically collaborated with the Nazis.

        • Michael James

          If there is a potential glass-half-full to Brexit it could be this. But it seems unlikely without going thru a profoundly regressive learning phase, again. The alternative will be a full reversion to quasi-authoritarian days of empire run by the likes of the entitled Jacob Rees-Moggs.

        • Ross Bleakney

          My mistake. Thanks for the correction (I must have gotten the early TCP/IP work confused with the early WWW work).

  2. Tunnel Vision

    Not sure what your point is here. Construction costs vary for may different reason, scale, profitability, availability of resources both human and material, standard of living, procurement practices etc. If you believe the US costs should drop to match the rest of the world then your going to be waiting a long long time. Your also missing a major point that many of the big European and Asian contractors are part of conglomerates who make money from other sources, or in China’s case are offshoots of what were Government construction bureau, that is they do not necessarily need to make a profit.

    • Alon Levy

      The contractors here and in the US are often the same ones, though… and for what it’s worth there’s precedent for costs dropping, Milan M5 and the Passante Railways were both a lot cheaper than Milan M3 was if I’m getting my inflation rates right.

    • araali

      Why would construction companies bid for projects they’d loose money on? In Germany f.e. many (public transit) projects are build by small companies that definitely can not afford to loose money on them (and do not have an alternative source of income).

      • Herbert

        Plus I’d argue there’s actually a premium for public sector contracts as municipalities have in the past failed to pay on time actually causing some bankruptcies

  3. michael

    One particularly American preoccupation is the idea that all transportation investments need to be in support of a goal of no commuter congestion. The rest of the developed world seems to be somewhat competent at thinking of transportation networks as redundant layers: a road layer, a bus layer, a rail layer, bike & ped, etc. Each one can operate somewhat independently & is robust enough to service most of a person’s critical needs (connectivity to jobs, groceries, schools).

    While in the US, the default is an overbuilt road network with scattershot of high cost/low value projects to supplement capacity for the 0.5-8/hrs day that the road network is snarled. In the US, the relative quality of the transit networks scale with the impassability of the roads, where in other countries there can be both functional roads & transit. Anyway, since transportation projects are aimed at providing incremental rush capacity, they tend to be pretty expensive across all modes especially compared to their economic value.

  4. The Economist

    I am not sure if I understand your assertion that property rights in the US are weak. They might be weak in respect of as what is written into the law as voted by Congress, but overall once case law and precedents as set by the courts are included, the property rights as they come to real estate are some of the strongest. This is in the sense that while the state can still get your property if it desires, it will have to pay through the nose for it. In the US extremely high value is assigned to things such as view, noise, “rural feel of community”, real and imaginary pollution, traffic, and so on.

    For example, on Long Island quite a few towns fought tooth and nail the third main track project on base of incremental noise due to the increased train counts with the third track. Eventually they all settled, but not until the state agreed to spend large amounts of money for noise walls. The reality is that with continuously welded rail on what is a straight segment (so no curve wheel slip) any increase above the existing noise level was going to be very minimal and so the impact even on the properties directly next to the tracks would have been minimal and probably more than compensated for by the local benefits of the project (grade separation of several crossings and the resulting reduction in auto pollution and waiting times). However based on past precedents courts would have likely assigned value in the multiple thousands per property even two-three blocks away from the tracks, so the state settled for what is probably $100+ million in unnecessary noise walls rather than suffer 2-3 years of delays in courts. How is this a weak property law if even a property owner far from the tracks counts for compensation for what is practically undetectable noise increase? If I as a property owner can influence what gets built several blocks away based on claims about noise (or view, traffic, whatever), how is this weak property law? In the US a sense my property does not end at my property border. It extends much further as I can claim that various things in my locality influence the value of my property and I can either get paid for it or force the project to make expensive changes. A real property here does not end at its boundaries, but includes nebulous rights over the surrounding properties. Those nebulous rights are not written anywhere, but they are crystallized by the courts (or zoning regulations) and have very real dollar values attached to them.

    My understanding is that this form of extortion does not really exist in Europe and Asia, or that it is minimal. Am I wrong?

    • Alon Levy

      France has extensive extortion. The LGV PACA has been extremely impacted: NIMBYs blocked roads in protest of plans to build the LGV along a mostly above-ground inland route, and together with Marseille boosters who wanted a through station they got SNCF to change the route to a tunnel-heavy coastal one, at high expense.

      The Long Island extortion you describe is more complicated than this. There is an informal rule that the LIRR is Long Island’s fief; what the local notables want, they get. When the state really wants something to happen it can make it happen over NIMBY objections – hence Cuomo removed Helena Williams when she opposed Penn Station Access (as did other Long Island interests) for turf reasons – but the third track is not a big priority and is billed as exclusively about Long Island.

      In contrast, if you’re between two places, things can happen over your objections. California beat the Peninsula lawsuits against high-speed rail and did not build any extra mitigations. On the contrary, Caltrain actually did an anti-mitigation due to political pressure from another source (namely, industrial users): it unilaterally gave up its guillotine clause allowing it to kick out freight service from the line, which is minimal and unprofitable but requires longer viaducts at grade separations as freight trains can’t climb steep grades. There is a lot of excessive scope in the California HSR plans, including on the Peninsula, but it comes from agency turf battles rather than from court mandates.

      The link I posted is instructive: it notes how in Japan 75% of the cost of an urban highway is land acquisition, whereas in the US it’s only 25%, since the government can pay depressed real estate prices in depressed urban neighborhoods.

      • Michael James

        Alon Levy, 2019/03/12 – 11:14
        France has extensive extortion. The LGV PACA has been extremely impacted: NIMBYs blocked roads in protest of plans to build the LGV along a mostly above-ground inland route, and together with Marseille boosters who wanted a through station they got SNCF to change the route to a tunnel-heavy coastal one, at high expense.

        We’ve discussed this at length previously. I don’t think this falls into the class of “extortion” like those small enclaves of the very wealthy/prosperous who hold at ransom an entire line that would serve a lot more people up and down the line.
        Re the PACA LGV, one has to ask what and who is it supposed to serve? Nice ville may be the single biggest destination, averaged over the year, but the awkward reality is that the entire Cote d’Azure is densely populated–all year round without considering summer–and that is why the existing line follows that tortuous coastal route. While it may be true that such a TGV is not going to stop at many stations, there are enough centres to warrant multiple trains per day. The expense is at the pain threshold but this is once-in-an-era infrastructure that will serve for the next century.
        ………..
        I remember the early LGVs in France ran into local objections at various places. One was a top-rated (first growth?) winery which in the end Mitterrand caved, and ordered a tunnel be built under it rather than the much cheaper cutting.

        • Alon Levy

          The intermediate stops envisioned on the LGV PACA aren’t really serving the rest of the Riviera… there’s Toulon, but it already has pretty good service since it’s close enough to Marseille that there isn’t much of a slog on the classical line. There are plans for two outlying stations near the Var/Alpes-Maritimes boundary, but they’re somewhat inland and one is intended to serve Sophia-Antipolis, which will most likely end up as just another origin station for people in the suburbs, like Aix-en-Provence, which is de facto Marseille-bis. There are no plans for trains to stop at Cannes, which is Alpes-Maritimes’ second busiest stop, and I don’t think there are plans to continue to Monaco, which has the second busiest station in the Riviera.

          • Michael James

            All true. The geography is the killer factor. Cannes is in that squiggle of contorted coast that would be very tricky, ie. expensive, for a LGV. And the inland station is quite close. Monaco is not included presumably because the principality doesn’t want to make its financial contribution (and possibly not many Monégasques will use the train). And that is the other big problem: the locals need to come up with 40-50% of the cost. It has probably evolved into a waiting game to see who blinks first. It was not in Macron’s list of 5 new lines to get funding, last year.

  5. Roi

    The criticism of pre-2008-crisis Spanish infrastructure projects was not about their relative cost but about their existence. Each regional government typically built a high-speed rail to Madrid that hardly anyone ever used, an airport that never saw a single airplane and the obligatory Calatrava-designed bridge in the regional capital. These projects might have been cheaper to build than comparable projects elsewhere, but the point is that they were completely superfluous. The only reason they were built in the first place was to inflate politicians’ egos and line their contractor friends’ pockets. Thus every Euro spent on them is viewed as corrupt.

    • Michael James

      This may be largely true, and in no way should politicians be excused this nonsense. But two points.
      One is that it is unlikely the AVE HSR network is a poor investment. Today’s econocrats will claim this but history will disprove them. (Then they also fume that China has overspent on such infrastructure … ). This will never be the case for the regional airports and this was obvious to all, long before they were built.
      Second, local politicians may have rode along on this money train but it was enabled by the exact same mechanism that fueled the US (and Spanish) junk mortgage collapse, ie. totally irresponsible lending by local banks on the back of loose money within the Eurozone by the bigger international banks.
      This was true for both private and “government” projects. The most infamous is the private La Mancha/Don Quixote airport, in a tiny town, cost €1bn, had the longest runway in Europe and was sold off for peanuts to the Chinese (but the deal was blocked and it remains a ghost airport).
      And yes, it is no paradox that the AVE network would have undermined these regional airports, and are a more rational means to link up regions with both Spain’s main cities and the international air pax they serve.

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