A curious pattern can be found in subway construction costs around the world, based on GDP per capita. On the one hand, poor countries that have severe cultural cringe, such as former colonies, have high construction costs, and often the worst projects are the ones that most try to imitate richer countries, outsourcing design to Japan or perhaps China. On the other hand, poor-rich countries, by which I mean countries on the periphery of the developed world, have similar cultural cringe and self-hate for their institutions, and yet their imitation of richer countries has been a success; for example, Spain copied a lot of rail development ideas from Germany and France. This can be explained using the development economic theory of isomorphic mimicry; the rub here is that a poor country like India or Ethiopia is profoundly different from the richer countries it tries to imitate, whereas a poor-rich country like Spain is actually pretty similar to Germany by global standards.
What is isomorphic mimicry?
In the economic development literature, the expression isomorphic mimicry refers to when a poor country sets up institutions that aim to imitate those of richer countries in hope that through such institutions the country will become rich too, but the imitation is too shallow to be useful. A common set of examples is well-meaning regulations on safety, labor, environmental protection, and anti-corruption that are not enforced due to insufficient state capacity. Here is a review of the concept by Andrews, Pritchett, and Woolcock, with examples from Mozambique, Uganda, and India, as well as some history from the American private sector. More examples using the theory can be found in Turczynowicz, Gautam, Rénique, Yeap, and Sagues concerning Peru’s one laptop per child program, in Evans’ interpretation of Bangladesh’s domestic violence laws, and in Rajagopalan and Tabarrok on India’s poor state of public services.
While the theory regarding institutions is new, analogs of it for tangible goods are older. Postwar developmental states engaged in extensive isomorphic mimicry, building dams, steel plants, and coal plants hoping that it would transform them into wealthy states like the United States, Western Europe, and Japan; for the most part, they had lower economic growth than did the developed world until the 1980s. The shift within international development away from tangible infrastructure and toward trying to fix institutions came about because big projects like the Aswan Dam failed to create enduring economic growth and often had ill side effects on agriculture, the environment, or human rights.
How does isomorphic mimicry affect public transportation?
The best example of isomorphic mimicry leading to bad transit that I know of is the Addis Ababa light rail system. This is funded by China, whose ideas of global development are similar to those of the postwar first and second worlds, that is providing tangible physical things, like railroads. Unfortunately, usage is low, because of problems that do not exist in middle-income or rich countries but are endemic to Ethiopia. Christina Goldbaum, the New York Times’ transit reporter, who lived in East Africa and reported from Addis Ababa, mentioned four problems:
- Electricity is unreliable, so the trains sometimes do not work. In early-20th century America, electric railroads and streetcar companies built their own power supply and were sometimes integrated concerns providing both streetcar and power service; but in more modern countries, there is reliable power for urban rail to tap.
- Not many people work in city center rather than in the neighborhood they live in. This, again, has historical analogs – there were turn-of-the-century Brooklynites who never visited Manhattan. Thus, a downtown-centric light rail system won’t get as much ridership as in a more developed city.
- The train is expensive relative to local incomes, so many people stick with buses or ride without paying.
- The railroad cuts through streets at-grade, to save money, and blocks off pedestrian paths that people use.
The Addis Ababa light rail system at least had reasonable costs. A more typical case for countries that poor is to build urban rail at premium cost, and the poorer the country, the higher the cost. The reason is most likely that such countries tend to build with Chinese or Japanese technical assistance, depending on geopolitics, and therefore import expensive capital for which they pay with weak currencies.
In India, the most functional and richest of the countries in question, there is much internal and external criticism that its economic growth is not labor-intensive, that is the most productive firms are not the ones employing the most people, and this stymies social development and urban growth. I suspect that this also means there is reluctance to use labor-intensive construction methods, that is cut-and-cover with headcounts that would be typical in New York, Paris, and Berlin in the early 20th century, or perhaps mid-20th century Milan and Tokyo. International consultancies are centered on the rich world and recommend capital-intensive methods to avoid hiring too many sandhogs at a fully laden employment cost of perhaps 8,000€ a month; in India, that is the PPP-adjusted gross salary of an experienced construction worker per year, and if capital is imported then multiply its cost by 3 to account for the rupee’s exchange rate value.
Poor-rich countries are those on the margin of the developed world, such as the countries of Eastern and Southern Europe, Turkey, Israel, to a lesser extent South Korea, and the richer countries of Latin America such as Chile. These are clearly poorer than the United States or Germany. Their residents, everywhere I’ve asked, believe that they are poorer and institutionally inferior; convincing a Spaniard or an Italian that their country can do engineering better than Germany is a difficult task. Thus, these countries tend to engage in mimicry of those countries that they consider the economic center, which could be Germany in Southern Europe, Japan in South Korea, or the US or Spain in Spanish America.
However, being a poor-rich country is not the same as being a poor country. Italy is, by American or German standards, poor. Wages there are noticeably lower and living standards are visibly poorer, and not just in the South either. But those wages remain in the same sphere as American and German wages. The labor-capital cost ratios in Southern Europe are sufficiently similar to those of Northern Europe that it’s not difficult to imitate. Spain even mixed and matched, using French TGV technology for early high-speed rail but preferring the more advanced German intercity rail signaling system, LZB, to the French one.
Such imitation leads to learning. Spain imported German and French engineering ideas but not French tolerance for casual rioting or German litigiousness, and therefore can build infrastructure with less NIMBYism. Turkey invited Italian consultants to help design the early lines of the Istanbul Metro, but subsequently refined their ideas domestically in order to build more efficiently, for example shrinking station footprint and tunnel diameter to reduce costs. Seoul has a subway system that looks like Tokyo’s in many ways, but has a cleaner network shape, with far fewer missed connections between lines. As a result, all three countries – Spain, Turkey, Korea – now have innovative domestic programs of rail construction and can even export their expertise elsewhere, as Spain is in Ecuador.
Openness to novelty
Andrews-Pritchett-Woolcock stress the importance of openness to novelty in the public sector, and cite examples of failure in which bureaucrats at various levels refused to implement any change, even one that was proven to be positive, because their goal was not to rock the boat.
Cultural cringe is in a way a check on that. Isomorphic mimicry is an attempt to combine agenda conformity and closeness to novelty with a desire to have what the richest countries have. But in poor-rich countries, isomorphic mimicry is real imitation – there is ample state penetration in a country like Spain or Turkey rather than outsourcing of state capacity to traditional heads of remote villages, and education levels are high enough that many people know how Germany works and interact with Germany regularly. A worker who earns 2,000€ a month net and a worker who earns 3,000€ a month can exchange tips about how to apply for jobs, how to prepare food, what brands of consumer goods to buy, and where to go on vacation. They cannot have this conversation with a worker who earns 10,000€ a month net.
Within the rich world, what matters then is the realization that something is wrong and the solution is to look abroad. It doesn’t matter if it’s a generally poor-rich region like Southern Europe or a region with a poor-rich public sector like the United States – there’s enough private knowledge about how successful places work, but what’s needed is a public acknowledgement and social organization encouraging imitation and lifting voices that are most expert in implementing it.
And for all the jokes about how the United States or Britain is like a third-world country, they really aren’t. Their public-sector dysfunctions are real, but are still firmly within the poor-rich basket; remember, for example, that despite its antediluvian signaling capacity, the New York City Subway manages to run 24 trains per hour per track at the peak, which is better than Shanghai’s 21. Health and education outcomes in the United States are generally better than those of middle-income and poor countries on every measure. This is a public sector that compares poorly with innovation centers in Continental Europe and democratic East Asia, but it still compares; to try to do the same comparison in a country like Nigeria would be nonsensical.
The upshot then is that implementing best practices in developed countries that happen to be bad at one thing, in this case public transportation in the United States, can work smoothly, much like Southern Europe’s successful assimilation of and improvements on Northern European engineering, and unlike the failures in former colonies in Africa and Asia. But people need to understand that they need to do it – that the centers of innovation are abroad and are in particular in countries that speak English non-natively.
There’s an emerging mentality among left-wing urban planners in the US called “trust before streets.” It’s a terrible idea that should disappear, a culmination of about 50 or 60 years of learned helplessness in the American public sector. Too many people who I otherwise respect adhere to this idea, so I’m dedicating a post to meme-weeding it. The correct way forward is to think in terms of state capacity first, and in particular about using the state to enact tangible change, which includes providing better public transportation and remaking streets to be safer to people who are not driving. Trust follows – in fact, among low-trust people, seeing the state provide meaningful tangible change is what can create trust, and not endless public meetings in which an untrusted state professes its commitment to social justice.
What is trust before streets?
The trust before streets mentality, as currently used, means that the state has to first of all establish buy-in before doing anything. Concretely, if the goal is to make the streets safer for pedestrians, the state must not just build a pop-up bike lane or a pedestrian plaza overnight, the way Janette Sadik-Khan did in New York, because that is insensitive to area residents. Instead, it must conduct extensive public outreach to meet people where they’re at, which involves selling the idea to intermediaries first.
This is always sold as a racial justice or social justice measure, and thus the idea of trust centers low-income areas and majority-minority neighborhoods (and in big American cities they’re usually the same – usually). Thus, the idea of trust before streets is that it is racist to just build a pedestrian plaza or bus lanes – it may not be an improvement, and if it is, it may induce gentrification. I’ve seen people in Boston say trust before streets to caution against the electrification of the Fairmount Line just because of one article asserting there are complaints about gentrification in Dorchester, the low-income diverse neighborhood the line passes through (in reality, the white population share of Dorchester is flat, which is not the case in genuinely gentrifying American neighborhoods like Bushwick).
I’ve equally seen people use the expression generational trauma. In this way, the trust before streets mentality is oppositional to investments in state capacity. The state in a white-majority nation is itself white-majority, and people who think in terms of neighborhood autonomy find it unsettling.
Low trust and tangible results
The reality of low-trust politics is about the opposite of what educated Americans think it is. It is incredibly concrete. Abstract ideas like social justice, rights, democracy, and free speech do not exist in that reality, to the point that authoritarian populists have exploited low-trust societies like those of Eastern Europe to produce democratic backsliding. A Swede or a German may care about the value of their institutions and punish parties that run against them, but an Israeli or a Hungarian or a Pole does not.
In Israel, this is visible in the corona crisis: Netanyahu’s popularity, as expressed in election polls, has recently risen and fallen based on how Israel compares with the Western world when it comes to handling corona. In March, there was a rally-around-the-flag effect in Israel as elsewhere, giving Netanyahu cover to refuse to concede even though parties that pledged to replace him as prime minister with Benny Gantz got 62 out of 120 seats, and giving Gantz cover not to respond to hardball with hardball and instead join as a minister in Netanyahu’s government. Then in April and May, as Israel suppressed the first wave and had far better outcomes than nearly every European country, let alone the US, Netanyahu’s popularity surged while that of Gantz and the opposition cratered. The means did not matter – the entire package including voluntary quarantine hotels, Shin Bet surveillance for contact tracing, and a tight lockdown that Netanyahu, President Rivlin, and several ministers violated nonchalantly, was seen to produce results.
In the summer, this went in reverse. The second wave hit Israel earlier than elsewhere, and by late summer, its infection rate per capita was in the global top ten, and Israel had the largest population among those top ten countries. In late September it reached around 6,000 cases a day, around 650 per million people. The popularity of Netanyahu’s coalition was accordingly shot; Gantz himself is being nearly wiped out in the polls, but the opposition was holding steady, and Yamina, a party to the right of Likud led by Naftali Bennett that is not currently in the coalition and is perceived as more competent, Bennett himself having done a lot to moderate the party’s line, surged from its tradition 5-6 seats to 16.
Today the situation is unclear – Israelis have seen the state fight the second wave but it was not nearly as successful as in the spring, and right now there is a lot of chaos with vaccination. On the other hand, Israel is also the world’s vaccination capital, and eventually people will notice that by March Israel is (most likely) fully vaccinated while Germany is less than 10% vaccinated. Low-trust people notice results. If they’re disaffected with Netanyahu’s conduct, which most people are, they can then vote for a right-wing-light satellite party like New Hope, just as many voted Kulanu in 2015, which advertised itself as center, became kingmaker after the results were announced, and immediately joined under Netanyahu without trying to seriously negotiate.
Streets lead to trust
The story of corona in Israel does not exist in isolation. Low trust in many cases exists because people perceive the state to be hostile to their interests, which happens when it does not provide tangible goods. Many years ago, talking about his own history immigrating from the Soviet Union in the 1970s, Shalom Boguslavsky credited the welfare state for his integration, saying that if he’d immigrated in the 1990s he’d probably have ended up in a housing project in Ashdod and voted for Avigdor Lieberman, who at the time was running on Russian resentment more than anything.
In Northern Europe, perhaps trust is high precisely because the state provides things. My total mistrust of the German state in general and Berlin in particular is tempered by the fact that, at queer meetups, people remind me that Berlin’s center-left coalition has passed universal daycare, on a sliding scale ranging from 0 for poor parents to about €100/month for wealthy ones. This more than anything reminds me and others that the state is good for things other than dithering on corona and negatively stereotyping immigrant neighborhoods.
Such provisions of tangible goods cannot happen in a trust before streets environment. This works when the state takes action, and endless public meetings in which every objection must be taken seriously are the death of the state. It says a lot that in contrast with Northern Europe, in the United States even in wealthy left-wing cities it is unthinkable that the municipality can just raise taxes to pay teachers and social workers better. Low trust is downstream of low state capacity. Build the streets and trust will follow.
I’ve periodically written about consumption and production theories of cities – that is, whether people mostly move to cities based on consumption or production amenities. The production theory is that what matters is mostly production amenities, that is, jobs, and this underlies YIMBYism. Consumption theory is that people move for consumption amenities, and, moreover, these amenities are not exactly consumption in the city, for example good health outcomes, but consuming the city itself, that is neighborhood-level amenities in which who lives in the city matters. The latter theory, for example promulgated by Richard Florida, is that jobs follow consumption amenities like gay bars, and not the other way around. It is wrong and production theory is right, and I’d like to give some personal examples from Berlin, because I feel like Berliners all believe in consumption theory.
The situation in Berlin
Berlin is an increasingly desirable city. After decades in which it was economically behind, the city is growing. Unemployment, which stood at 19% in 2005, was down to 7.8% last year. With higher incomes come higher rents, and because Berlin for years built little housing as there was little demand, rents rose, and it took time for housing growth to catch up; on the eve of corona, the city was permitting about 6 annual dwellings per 1,000 people, up from about 1 in the early 2000s.
This is generally attributed to tech industry growth. There are a lot of tech startups in the city. I don’t want to exaggerate this too much – Google’s biggest Germany office is by far Munich’s, and the Berlin office is mostly a sales office with a handful of engineers who are here because of a two-body problem. But the smaller firms are here and the accelerator spaces are very visible, in a way that simply didn’t exist in Paris, or even in Stockholm.
Berlin’s production amenities
I might not have thought that Berlin should attract so much tech investment. My vulgar guess would be that tech would go to cities with many preexisting engineers, like Munich and Stuttgart, or maybe to Frankfurt for the international flight connections. But Berlin does make sense in a number of ways.
The city is mostly fluent in English. Jakub Marian’s map has France 39% Anglophone and Germany 56%, which doesn’t seem too outlandish to me. But Paris seems in line with the rest of France, whereas in Berlin, service workers seem mostly Anglophone, which is not the case in (say) Mainz or Munich.
The global tech industry is Anglophone, and good command of English is a huge production amenity. Other English-dependent industries seem to favor Anglophone European cities as well, for example various firms fleeing Brexit moved their European headquarters not to Paris but to Amsterdam or maybe Dublin.
The federal government is here. This is not relevant to tech – the startups here don’t seem to be looking for lobbying opportunities, and at any case German lobbying works differently from American lobbying and firm-level proximity to the capital is unimportant. However, the government stimulates local spending, which has increased employment. The government’s move here has been gradual, with institutions that during division were spread all over West Germany slowly migrating to Berlin.
The quality of infrastructure in Berlin is very good. The urban rail network was built when Berlin was Western Europe’s third largest city, after London and Paris, and has even grown after the war because the West built U7 and U9 to bypass Mitte. This means that commute pain here is not serious, especially on any even vaguely middle-class income. Moreover, Berlin has benefited from post-reunification investment, including Hauptbahnhof and two high-speed rail lines.
Consumption theory and the counterculture
The queer counterculture that I am involved with in Berlin tells a different story. To hear them tell it, Berlin has a quirky, individualistic, nonconforming culture, unlike the stifling normality of Munich. Artists moved here, and then other people moved here to be near the artists, paying higher rents until the artists could no longer afford the city. This story is told at every scale, from Berlin as a city to individual neighborhoods like Prenzlauer Berg and Neukölln. A lot of the discourse about Berlin repeats this uncritically, for example Feargus O’Sullivan at CityLab/Bloomberg Cities writes about the cool factor and about gentrification of old buildings.
It is also a completely wrong story. This is really important to understand: nobody that I know in the sort of spaces that are being blamed for gentrification, that is the tech industry and its penumbra, has any interest in the counterculture. I go to board games meetups full of tech workers who are fluent in English and often don’t know any German, and they have no connections at all to the local counterculture. They interact with immigrant culture spaces, not with the 95%+ white counterculture as defined by queer spaces in Neukölln that complain about gentrification in a neighborhood undergoing white flight at the rate of postwar New York (compare 2019 data, PDF-pp. 25 and 28, with 2016, PDF-pp. 28 and 31). Occasionally there are crossovers, as when an American comedian hosted live standup in February and then there were tech workers and said American also interacts with the counterculture, but a standup comic is not why Berliners complain.
Nor do I find foreign tech workers especially interested in German minutiae comparing Berlin with Munich. By my non-German standards, Berliners already jaywalk at indescribably lower rates, and I gather that Munich is stuffier but that’s not why I’m here and not there, the rents and the language are.
We’re not even particularly oppositional to the counterculture. I personally am because seeing queer space after queer space host indoor events during corona without masks was a horrifying experience; I went to a queer leftist meetup in late October in which people huddled together maskless and I was the only one with a mask on, except for one trans Australian physicist who drank a beer and then masked after finished. But the rest? They don’t care, nor should they. The counterculture is not the protagonist or the antagonist of Berlin’s story; it’s barely a bystander. Consumption theory is just what it promotes in order to convince itself that it’s important, that it spreads ideas and not viruses.
A bunch of Americans who should know better tell me that nobody really cares about construction costs – what matters is getting projects built. This post is dedicated to them; if you already believe that efficiency and social return on investment matter then you may find these examples interesting but you probably are not looking for the main argument.
Exhibit 1: North America
I wrote a post focusing on some North American West Coast examples 5 years ago, but costs have since run over and this matters from the point of view of building more in the future. In the 2000s and 10s, Vancouver had the lowest construction costs in North America. The cost estimate for the Broadway subway in the 2010s was C$250 million per kilometer, which is below world median; subsequently, after I wrote the original post, an overrun by a factor of about two was announced, in line with real increases in costs throughout Canada in the same period.
Metro Vancouver has always had to contend with small, finite amounts of money, especially with obligatory political waste. The Broadway subway serves the two largest non-CBD job centers in the region, the City Hall/Central Broadway area and the UBC, but in regional politics it is viewed as a Vancouver project that must be balanced with a suburban project, namely the lower-performing Surrey light rail. Thus, the amount of money that was ever made available was about in line with the original budget, which is currently only enough to build half the line. Owing to the geography of the West Side, half a line is a lot less than half as good as the full line, so Vancouver’s inability to control costs has led to worse public transportation investment.
Like Vancouver, Toronto has gone from having pretty good cost control 20 years ago to having terrible cost control today. Toronto’s situation is in fact worse – its urban rail program today is a contender for the second most expensive per kilometer in the world, next to New York. The question of whether it beats Singapore, Hong Kong, London, Melbourne, Manila, Qatar, and Los Angeles depends on project details, essentially on scoring which of these is geologically and geographically the hardest to build in assuming competent leadership, which is in short supply in all of these cities. I am even tempted to specifically blame the most recent political interference for the rising costs, just as the adoption of design-build in the 2000s as an in-vogue reform must be blamed for the beginning of the cost blowouts.
The result is that Toronto is building less stuff. It’s been planning a U-shaped Downtown Relief Line for decades, since only the Yonge-University-Spadina (“YUS”) line serves downtown proper and is therefore overcrowded. However, it’s not really able to afford the full line, and hence it keeps downgrading it with various iterations, right now to an inverted L for the Ontario Line project.
Los Angeles’s costs, uniquely in the United States, seemed reasonable 15 years ago, and no longer are. This, as in Canada, can be seen in building less stuff. High-ranking officials at Los Angeles Metro explained to me and Eric that the money for capital expansion is bound by formulas decided by referendum; there is a schedule for how to spend the money as far as 2060, which means that anything that is not in the current plan is not planned to be built in the next 40 years. Shifting priorities is not really possible, not with how Metro has to buy off every regional interest group to ensure the tax increases win referendums by the required 2/3 supermajority. And even then, the taxes imposed are rising to become a noticeable fraction of consumer spending – even if California went to majority vote, its tax capacity would remain very finite.
The history of Second Avenue Subway screams “we would have built more had costs been lower.” People with deeper historic grounding than I do have written at length about the problems of the Independent Subway System (“IND”) built in the 1920s and 30s; in short, construction costs were in today’s terms around $140 million per km, which at the time was a lot (London and Paris were building subways for $30-35 million/km), and this doomed the Second System. But the same impact of high costs, scaled to the modern economy, is seen for the current SAS project.
The history of SAS is that it was planned as a single system from 125th Street to Hanover Square. The politician most responsible for funding it, Sheldon Silver, represented the Lower East Side. But spending capacity was limited, and in particular Silver had to trade that horse for East Side Access serving Long Island, which was Governor George Pataki’s base. The package was such that SAS could only get a few billion dollars, whereas at the time the cost estimate for the entire 13-km line was $17 billion. That’s why SAS was chopped into four phases, starting on the Upper East Side. Silver himself signed off on this in the early 2000s even though his district would only be served in phase four: he and the MTA assumed that there would be further statewide infrastructure packages and the entire line would be complete by 2020.
Exhibit 2: Israel
Israel is discussing extending the Tel Aviv Metro. It sounds weird to speak of extensions when the first line is yet to open, but that line, the Red Line, is under construction and close enough to the end that people are believing it will happen; Israelis’ faith that there would ever be a subway in Tel Aviv was until recently comparable to New Yorkers’ faith until the early 2010s that Second Avenue Subway would ever open. The Red Line is a subway-surface Stadtbahn, as is the under-construction Green Line and the planned Purple Line. But metropolitan Tel Aviv keeps growing and is at this point an economic conurbation of about 3-4 million people, with a contiguous urban core of 1.5 million. It needs more. Hence, people keep discussing additions. The Ministry of Finance, having soured on the Stadtbahn idea, bypassed the Ministry of Transport and introduced a complementary three-line underground driverless metro system.
The cost of the system is estimated at 130-150 billion shekels, which is around $39 billion. This is not a sum Israelis are used to seeing for a government project. It’s about two years’ worth of IDF spending, and Israeli is a militarized society. It’s about 10% of annual GDP, which in American or EU-wide terms would be $2 trillion. The state has many competing budget priorities, and there are so many other valid claims on the state coffers. It is therefore likely that the metro project’s construction will stretch over many years, not out of planning latency but out of real resource limits. People in Israel understand that Gush Dan has severe traffic congestion and needs better transportation – this is not a point of political controversy in a society that has many. But this means the public is willing to spend this amount of money over 15-20 years at the shortest. Were costs to double, in line with the costs in most of th Anglosphere, it would take twice as long; were they to fall in half, in line with Mediterranean Europe, it would take half as long.
Exhibit 3: Spain
As the country with the world’s lowest construction costs for infrastructure, Spain builds a lot of it, everywhere. This includes places where nobody else would think to build a metro tunnel or an airport or a high-speed rail line; Spain has the world’s second longest high-speed rail network, behind China. Many of these lines probably don’t even make sense within a Spanish context – RENFE at best operationally breaks even, and the airports were often white elephants built at the peak of the Spanish bubble before the 2008 financial crisis.
One can see this in urban rail length just as in high-speed rail. Madrid Metro is 293 km long, the third longest in Europe behind London and Moscow. This is the result of aggressive expansion in the 1990s and 2000s; new readers are invited to read Manuel Melis Maynar’s writeup of how when he was Madrid Metro’s CEO he built tunnels so cheaply. Expansion slowed down dramatically after the financial crisis, but is starting up again; the Spanish economy is not good, but when one can build subways for €100 million per kilometer, one can build subways that other cities would not. In addition to regular metros, Madrid also has regional rail tunnels – two of them in operation, going north-south, with a third under construction going east-west and a separate mainline rail tunnel for cross-city high-speed rail.
Exhibit 4: Japan
Japan practices economic austerity. It wants to privatize Tokyo Metro, and to get the best price, it needs to keep debt service low. When the Fukutoshin Line opened in 2008, Tokyo Metro said it would be the system’s last line, to limit depreciation and interest costs. The line amounted to around $280 million/km in today’s money, but Tokyo Metro warned that the next line would have to cost $500 million/km, which was too high. The rule in Japan has recently been that the state will fund a subway if it is profitable enough to pay back construction costs within 30 years.
Now, as a matter of politics, on can and should point out that a 30-year payback, or 3.3% annual interest, is ridiculously high. For one, Japan’s natural interest rate is far lower, and corporations borrow at a fraction of that interest; JR Central is expecting to be paying down Chuo Shinkansen debt until the 2090s, for a project that is slated to open in full in the 2040s. However, if the state changes its rule to something else, say 1% interest, all that will change is the frontier of what it will fund; lines will continue to be built up to a budgetary limit, so that the lower the construction costs, the more stuff can be built.
Conclusion: the frontier of construction
In a functioning state, infrastructure is built as it becomes cost-effective based on economic growth, demographic projections, public need, and advances in technology. There can be political or cultural influences on the decisionmaking process, but they don’t lead to huge swings. What this means is that as time goes by, more infrastructure becomes viable – and infrastructure is generally built shortly after it becomes economically beneficial, so that it looks right on the edge of viability.
This is why megaprojects are so controversial. Taiwan High-Speed Rail and Korea Train Express are both very strong systems nowadays. Total KTX ridership stood at 89 million in 2019 and was rising on the eve of corona, thanks to Korea’s ability to build more and more lines, for example the $69 million/km, 82% underground SRT reverse-branch. THSR, which has financial data on Wikipedia, has 67 million annual riders and is financially profitable, returning about 4% on capital after depreciation, before interest. But when KTX and THSR opened, they both came far below ridership projections, which were made in the 1990s when they had much faster economic convergence before the 1997 crisis. They were viewed as white elephants, and THSR could not pay interest and had to refinance at a lower rate. Taiwan and South Korea could have waited 15 years and only opened HSR now that they have almost fully converged to first-world Western incomes. But why would they? In the 2000s, HSR in both countries was a positive value proposition; why skip on 15 years of good infrastructure just because it was controversially good then and only uncontroversially good now?
In a functioning state, there is always a frontier of technology. The more cost-effective construction is, the further away the frontier is and the more infrastructure can be built. It’s likely that a Japan that can build subways for Korean costs is a Japan that keeps expanding the Tokyo rail network, because Japan is not incompetent, just austerian and somewhat high-cost. The way one gets more stuff built is by ensuring costs look like those of Spain and Korea and not like those of Japan and Israel, let alone those of the United States and Canada.
Myth: American cities have undergone inversion, in which poorer people are more suburban than richer people.
Reality: at least on the level of people commuting to city center, wages generally rise with commute distance. In particular, the phenomenon of supercommuters – people traveling very long distances to work – is a middle- and high-income experience more than a low-income one. This is true even in Los Angeles, a Sunbelt city with more of a drive-until-you-qualify history than the Northeastern cities. The only exception among the largest US cities is San Francisco, and there too, the poorest distance is 5-10 km out of the Financial District.
All data in this post comes from OnTheMap and is as of 2017, the latest year for which there is data. The methodology is to define a central business district, generally a looser one than in past post but still much smaller than the entirety of the city, and look at people who work in it and live within annuli of increasing radius from a specific central point within the CBD. OnTheMap puts jobs into three income buckets, the boundary points being $1,250 and $3,333 per month; we look at the proportion of jobs in the highest category.
I report the annuli in kilometers, but technically they’re in multiples of 3.11 miles, which is very close to 5 km.
|City||New York||Los Angeles||Chicago||Washington||San Francisco||Boston|
|CBD||3rd, 60th, 9th, 30th||I-10, I-110, river||Congress, I-90, Grand||6th, R, river, E||Broadway, Van Ness, 101, 16th||I-90, water, Arlington|
|Point||Grand Central||7th/Metro Center||State/Madison||Farragut||Market/2nd||Downtown Crossing|
In all six metro areas above except Los Angeles, the income in the innermost 5-km circle is higher than in the 5-10 km annulus. In Chicago that inner radius is in fact the wealthiest, but in Boston it’s below average, and in New York, Washington, and San Francisco it is poorer than wide swaths of suburbia. There is always a large region of poverty in an urban radius, which is roughly the inner 15 km in Los Angeles, the 5-20 km annulus in New York, the 10-15 km radius in Chicago, and so on.
This of course does not take directionality into account. In Chicago, it is especially important – to the north, there is wealth at all radii, and to the south, there is mostly poverty. In contrast, in New York directionality is less important, and it is in a way the purest example of the poverty donut model, in which the center is rich, the suburbs are rich, and the in-between neighborhoods are poor, without wedges that form favored quarters or wedges that form ill-favored quarters.
The importance of this is that because the inner and outer limits of the poverty donut are slowly moving outward, there is talk of suburbanization of poverty – or, rather, there was in the decade leading up to corona, but I suspect it will return once mass vaccination happens. However, even now, American cities are not Paris or Stockholm, where wealth mostly decreases as distance from the center increases, even though both cities have intense directionality (rich northeast, poor south and west in Stockholm, and the exact opposite in Paris). The poorest place remains the inner city, just beyond the near-downtown zone at what I would call biking range from city center jobs if any American city had even semi-decent biking infrastructure.
This contrasts with various schemes to subsidize suburbs that assume poverty has already suburbanized. Massachusetts, where even in the inner 5 km radius the $40,000+ share is below average, has a concept called Gateway Cities, defined to mean roughly “low- and lower-middle-income cities that aren’t Boston.” Of those, about one, Chelsea, is inner-urban, while the others include Springfield and various ex-industrial cities that are generally no poorer than Boston and lie amidst suburban wealth, like Lowell and Haverhill. Based on the idea that Massachusetts poverty is in the Gateway Cities and not in Boston itself, it justifies vast place-based subsidies that mostly go to people who are decently well-off while Dorchester has to beg for slightly better public transportation to Downtown Boston.
In New York, one likewise hears more about the poverty of Far Rockaway than about that of Harlem. There’s this widespread belief that Harlem is no longer poor, that it’s fully gentrified because there’s one bagel shop on 116th Street that caters to a mostly white middle-class clientele. This is related to the stereotype of the Real New Yorker, weaponized so that the cop or the construction worker who is a third-generation New Yorker and lives at the outermost edge of the city is an inherently more moral person than the Manhattanite or the immigrant and is the very definition of the working class while earning $90,000 a year. This goes double if this Real New Yorker lives on Long Island, usually with some catechism about how the city is too expensive even though the suburbs are about equally costly. The one place-based policy that would benefit the city, having the state integrate its schools with those of the generally better-resourced suburbs, is unthinkable.
It’s notable that this discourse that overrates how poor American suburbia is comes exclusively from people who tend to sympathize with the poor. People with Thatcherist attitudes toward the poor abound in the United States, and tend to correctly believe that the inner city is poorer than the suburbs, and if anything to overrate the extent of urban poverty. In either case, the conclusion groups of Americans reach is that the government must subsidize the suburbs further; all else is just motivated reasoning.
In reality, if one has the Thatcherist or Old Tory moralistic attitude that poverty is a personal failure then, with reservations, one should continue believing the large American city is inherently immoral. But if one has the attitude that poverty is a social failure that is solvable with social programs, then one must realize that there is more of this in central cities than in their suburbs, even faraway suburbs that are called drive-until-you-qualify because they are slightly poorer than some other suburbs, and therefore if anti-poverty programs must be place-based then they should be urban.
Matt Yglesias has a blog post called Make Blue America Great Again, about governance in rich liberal states like New York and California. He talks about various good government issues, and he pays a lot of attention specifically to TransitMatters and our Regional Rail project for the Boston region, so I feel obliged to comment more on this.
The basic point Matt makes is that the quality of governance in rich liberal American states is poor, and as a result, people do not associate them with wealth very consistently. He brings up examples about the quality of schools and health care, but his main focus is land use and transportation: the transportation infrastructure built in New York, California, etc. is expensive and not of high quality, and tight zoning regulations choke housing production.
That said, I think there’s a really important screwup in those states and cities that Matt misses: the problem isn’t (just) high costs, but mostly total unwillingness to do anything. Do-nothing leaders like Charlie Baker, Andrew Cuomo, Gavin Newsom, and Bill de Blasio aren’t particularly interested in optimizing for costs, even the first two, who project an image of moderation and reason.
The Regional Rail proposal’s political obstacles are not exactly a matter of cost. It’s not that this should cost $4 billion (without the North-South Rail Link) but it was estimated at $15 billion and therefore there’s no will to do it. No: the Baker administration seems completely uninterested in governing, and has published two fraudulent studies making up high costs for both the North-South Rail Link and rail electrification, as well as a more recent piece of fraud making up high costs for Boston-Springfield intercity rail. The no comes first, and the high costs come second.
This history – no first, then high costs – is also the case for New York’s subway accessibility program. The MTA does not want it; the political system does not care either. Therefore, when disability rights advocates do force some investment, the MTA makes up high costs, often through bundling unnecessary investments that it does want, like rebuilding station interiors, and charging these projects to the accessibility account. A judge can force an agency to build something, but not to build it competently and without siphoning money.
I want to emphasize that this does not cover all cases of high American costs. Second Avenue Subway, for example, is not the result of such a sandbag: everyone wants it built, but the people in charge in New York are not competent enough to build it affordably. This does accord with Matt’s explanation of poor Northeastern and West Coast governance. But not everything does, and it’s important to recognize what’s going on.
The other important point is that these do-nothing leaders are popular. Baker is near-tied for the most popular governor in the United States with another do-nothing Northeastern moderate Republican, Maryland’s Larry Hogan. Andrew Cuomo’s approval rate has soared since he got 43,000 people in the state killed in the corona crisis.
People who live in New York may joke that the city has trash on the street and cockroaches in apartments, but they’re pretty desensitized to it. They politically identify as Democrats, and once corona happened they blamed Trump, as did many people elsewhere in the United States, and forgave Democrats who mismanaged the crisis like Cuomo. Baker and Hogan are of course Republicans, but they perform a not-like-the-other-Republicans persona, complete with open opposition to Trump, and therefore Massachusetts Democrats who have a strong partisan identity in federal elections are still okay with do-nothing Republicans. People who really can’t stand the low quality of public services leave.
Construction cost reform is pretty drastic policy, requiring the destruction of pretty powerful political forces – the system of political appointments, state legislators and mayors with a local rather than national-partisan identity, NIMBYs, politically-connected managers, the building trades, various equity consultants (such as many Los Angeles-area urbanists). They are not legally strong, and a governor with a modicum of courage could disempower them, but to be a moderate in the United States means to be extremely timid and technologically conservative. Matt himself understands that last point, and has pointed this out in connection with moderates who hold the balance of power in the Senate, like Joe Manchin and Susan Collins, but use it only to slightly shrink proposed changes and never to push a positive agenda of their own.
So yes, this is a construction cost crisis, but it’s not purely that. A lot of it is a broader crisis of political cowardice, in which non-leftist forces think government doesn’t work and then get elected and prove it (and leftists think real change comes from bottom-up action and the state is purely for sinecures, courtesy of the New Left). I warned in the spring that corona is not WW2 – the crisis is big enough to get people to close ranks behind leaders, but not to get them to change anything important. These states are rich; comfortable people are not going to agitate for the destruction of just about every local political power structure just to get better infrastructure.
It increasingly looks like the cause of high construction costs in the English-speaking world is the trend of the privatization of the state since the 1980s. Instead of public planning departments, there is growing use of consultants. This trend is intensifying, for example with increasing use of design-build contracts, introduced into Canada just before costs exploded.
Q. Does this mean neoliberalism is to blame?
A. Not really.
Nearly every political and economic trend in the last 40 years in a developed country can be connected with neoliberalism. The transition in South Korea from military government to something like social democracy has been reasonably compatible with the Washington Consensus principles.
In fact, two opposite trends have both been criticized as neoliberal: the move from income support to workfare in the Clinton administration in the 1990s, but also calls from some liberals, greens, and social democrats today for basic income.
Even things that are mostly about things that are what people on the left criticize as neoliberalism are not necessarily about the privatization of the state. Any of the following agenda items can be plausibly called neoliberal:
- Privatization of state-owned enterprises like the mail, the national airline, the national railway, road maintenance, and health care.
- Reduction in top income tax rates from historic levels that were sometimes higher than 90% to something closer to today’s 50% in various rich Western countries.
- Liberalization of foreign exchange and foreign investment.
- Voucher systems for public services like schools.
- Fiscal and monetary austerity.
The key here is that none of these items is exactly privatization of planning. Germany had welfare reform in the Schröder era, Hartz IV, that SPD and the Greens don’t even like anymore. It’s had austerity budgets under Angela Merkel, and inflation has been below the 2% target. The Netherlands privatized health care. Sweden has contracted out operations of rail and many other infrastructure services.
However, the privatization of the state itself is mostly a British and American program, which has spread to other English-speaking countries through their cultural cringe. Under Macron, the most neoliberal of French leaders, Grand Paris Express staffed up as a public planning agency, rather than contracting everything out to consultants.
Even when France engages in design-build, it’s not the same as in the Anglosphere. Design-build in France means that the three teams that are typically kept separate – public planning, private design, private construction – talk to one another more regularly, still with public oversight. There is still strong civil service, and no impetus so far to privatize it or discount its advice on the American and increasingly British model.
There is neoliberalism in Japan, and in Germany, and in France, and in Scandinavia. And in none of these do we see Anglo construction costs. This matters.
I’d like to propose a test whenever someone proposes a new conversation into public transit: what tangible changes come from this that would not have come about otherwise?
I put this out because I’ve seen a lot of people discuss the impact of corona on transportation and bring up solutions that they believed before the crisis began and that are at best loosely related to the pandemic. In the US these are BRT, higher off-peak bus and train frequency, bus network redesigns, and off-board fare collection, among others. All of these have been popular among American transit advocates for years, but now there’s spin talking about how they’re useful for corona.
Another buzzword in the US now is equity, in which every person is expected to figure out how to be less racist, which in practice means justifying what they already believed as a solution to racism. It’s weird – I asked on Twitter what the most useful transportation investments are from an equity perspective, and I got a lot of really good ideas in comments, but almost invariable they are things that are good even without the equity perspective. There are some differences in priorities and focus, but for example the value of (say) Second Avenue Subway Phase 2 is high regardless of any equity concerns.
Note that this does not mean all topical or newsworthy discussions regarding public transportation are useless. Most of them are, but there are some interesting ones. The most notable, I think, is the issue of equity for women as opposed to the more standard measures of looking at equal access for the working class or racial minorities. Nicole Badstuber, for example, wrote about it last year, and specifically mentioned an example: women walk at higher rates than men and drive at lower rates, and snow clearing priorities that had roads ahead of sidewalks were therefore sexist. Crush dummies for cars are man-sized and therefore result in cars that are less safe for smaller-size people, such as the average woman. Nicole also brings up the issue of trip chaining, which a number of commentators brought up in 2012 as well.
All of these have concrete implications that one would not have otherwise thought of: dummies should be sized for the average person and not the average man (and really have a variety of sizes to test car safety for), public transportation should be designed to facilitate trip chaining, etc.
However, this is not the typical case of trying to connect public transportation with another political idea or current event. To distinguish real additions from cases of “I am anti-racist, I like this, therefore this is anti-racist” that just create more red tape, it’s always important to ask what new concrete actions this recommends that would not be otherwise undertaken.
550 new coronavirus cases in Berlin yesterday. 7,000 in Germany. 110,000 in the European Union, which at 240 per million people is even higher than the US, which is at 200/million. French hospitals are flooded with corona patients, and the state expresses its grave concerns but will still not set up quarantine hotels or universalize the use of surgical masks or do anything else that Taiwan did in less time. This is the second wave, and seven months after Taiwan showed the way how to deal with this and ended up being the only country this year to have positive economic growth to boot, Europe (and the US) still stays in its comfort zone of mass death.
It’s worth discussing the excuses, because so many of them port well to the realm of public transportation, where Europe is not so bad (there are even things East Asia can learn from us); Europe’s real disaster compared with rich Asia is in urbanism and its resistance to tall buildings. But the United States is horrific on all matters of transportation and urban redevelopment and the excusemaking there is ensuring no infrastructure can be built.
Excuse #1: the restricted comparison
The Max Planck Society (MPG) put out a statement three weeks ago, with some interesting insights about the need for a multi-pronged strategy, including contact tracing, hygiene, and social distancing. But it kept engaging in these silly intra-European comparisons, praising Germany in contrast with Britain. At no point was there any engagement with East Asia, even though we know that Taiwan has not had community spread since April, and that in Korea and Japan the current rates are about 2 and 4 daily cases per million people respectively.
Excuse #2: bullshit about culture
I’m told that there is general understanding within Germany that Taiwan and South Korea are doing far better. However, people keep making up cultural reasons why Europe can’t have what East and Southeast Asia have. This excuse unfortunately is not restricted to people who are totally unaware: a few months ago, Michel Bauwens, a Belgian degrowth advocate who lives in Thailand, talked up Thailand’s corona suppression, but attributed it to a communitarian, collectivist culture. The Thais are mass-protesting their autocratic government’s state of emergency (while wearing masks, unlike Western anti-regime protesters); what collectivism? The actual policy differences – mandatory centralized quarantine for people who test positive, mask wearing mandates – were not mentioned.
When I bring up the necessity of centralized quarantine, and even the fact that Israel used corona hotels to nearly eradicate the virus in the first wave (the second wave came from mass abandonment of social distancing – MPG is right about multi-pronged strategies), Europeans and Americans keep making a “but freedom” line. It’s strange. Yes, Thailand is autocratic. But Taiwan and South Korea are not – and they had authoritarian governments within living memory, and both are currently run by political parties that emerged out of democratic opposition to autocracy in the 1980s and 90s, and that far from becoming autocrats themselves, ceded power peacefully when they lost reelection in the past.
Excuse #3: the fake tradeoff
Many aspects of policy involve genuine tradeoffs. But many others don’t, and corona protection is one. Taiwan is the only developed country that is projecting positive economic growth in 2020. South Korea is projecting 1% contraction, the smallest contraction in the OECD, of which Taiwan is not a member. There is no economy-death tradeoff. Plowing through with reopening before the virus has been suppressed just means mass closures later and a weaker economy. The only major suppression country that is seeing economic contraction is Thailand, whose economy is based heavily on tourism and therefore more sensitive to crises outside its borders than are the industrial export-based economies of Taiwan and Korea.
Excuse #4: learned helplessness
I write occasionally about the importance of state capacity, but centralized quarantine is not some specialized technique only available to the most advanced states. It was routine in developed countries until the 1960s, when the incidence of infectious disease had fallen to a point that it was no longer necessary. The same is true of social distancing – Nigeria for example has used it and appears to be successful, with semi-decent test positivity rates and lower per capita confirmed infections than Korea.
However, various leaders keep saying “we can’t.” This is not about technical matters. Rather, it’s about political ones: we can’t established corona hotels, we can’t ban indoor dining and drinking, we can’t scale up surgical mask production like Taiwan did 8 months ago and require people to wear surgical masks in public. The only thing Europe seems capable of doing is prohibiting travel from countries that at this point often have less corona than we do.
This is learned helplessness. Risk-averse politicians who know on some level what needs to be done are still too spineless to do it, even knowing very well that successfully suppressing corona is an amazing crowd booster.
The connection with infrastructure
All of the above problems also lead to disastrous infrastructure projects. This is to some extent a problem in Germany, where “we can’t” is a common excuse for surrender to NIMBY opposition; this is why certain key high-speed rail segments have yet to be built. But it’s a truly massive drag on the English-speaking world, especially the United States. I have seen advocates engage in internal-only comparisons within the last 24 hours; the other excuses, I saw earlier this week, and many times in the last few months, with so many different American transit managers incanting “it’s not apples-to-apples” whenever Eric and I ask them about costs. One literally said “we can’t” and “it’s not possible” and is regionally viewed as progressive and forward-thinking.
In the same manner Europeans discount any knowledge produced outside of Europe and the United States, Americans discount everything produced outside their country. Occasionally they’ll glance at Canada and Britain to affirm prior prejudices. They treat foreign language fluency as either dilettantism or immigrant poverty and not as a critical skill in the modern world right next to literacy and numeracy. They’ll flail about as they die of corona and blame one another when, just as the EU flag today is twelve yellow coronaviruses on a field of blue, the US flag is fifty white viruses on a field of blue with red and white stripes.
If I have a bad idea and you have a bad idea and we exchange them, we now have two bad ideas.
But more than that. If I have a bad idea and you have a good idea and we exchange them, we should both land on your good idea – but that requires both of us to conceive of the possibility that your idea could in fact be better than mine. This is not always the case. In exchanges between Britain and Australia, both sides think of Britain as the metropole and Australia as the periphery, so ideas flow from Britain outward. The same is true in exchanges between either Britain or the United States and Canada.
We even see this in exchanges between the Anglosphere and the rest of the world. Europe knows what the United States is like. We speak English and read American news to some extent. We have occasional sympathy protests with American causes that we feel are reflected at home; I have never seen Americans do the same with people outside North America except for very small protests concentrated among a particular diaspora, such as small groups of Israeli-Americans protesting Netanyahu’s policies in front of Israeli consulates.
And most of us in Europe look at the United States with a combination of denigration and disgust, but it’s not everyone, and in a pandemic, the least responsible members of society set everyone’s risk levels. There’s been some American influence on the populist right in Europe – people who see Trump and think “we would like to be governed like that”; this is still sporadic, e.g. the Gilets Jaunes used French populist language and had no connections to the United States, but the corona denialist protests in Germany have imported some American language like QAnon symbols. And more broadly, seeing other countries fail emboldens the pro-failure caucus at home: the Israeli immigrant who told me 2 months ago that “800 cases a day is nothing” Germany-wide would probably not have said this if Israel maintained its May infection rates. Of course the vast majority of denialists here are not Israeli or Jewish, and many are even anti-Semitic, but they look up to the failure that is the United States and not to the one that is Israel.
The corona example above is specific to Germany and is a bad idea that remains a minority position in Germany, but good ideas from the United States have made it to Europe elsewhere. For example, France made it easier to start a business, to the point that incorporation takes a few days and 4,000 euros in a corporate account, regulations on small business are very friendly, and there is elite consensus in favor of making hiring more flexible and some movement in that direction in the Macron administration. On handling racial diversity, Europe is sporadically importing ideas from the US, some good, some terrible, but again there is little attempt at learning in the other direction even when our cops kill a few dozen people per year Western Europe-wide and America’s kill 1,000.
I bring this up, because in transportation, one sees a lot of learning of practices both good and bad, if they come from a higher-prestige place. I may even speculate that this is why the most culturally dominant part of the world has the worst institutions when it comes to building infrastructure: if New York were capable of building something for one eighth the cost of Paris or one sixth that of Berlin, instead of the reverse, then Paris and Berlin would be capable of learning to adopt New York’s institutions.
To speculate even further, this may be why the cheapest place to build subways in East Asia is not Japan but Korea – if Japan were the best, South Korea would have learned from it. There are extensive similarities between these two countries’ institutions in general and urbanism and transportation in particular, coming from one-way learning of Japanese ideas in Korea more than from reciprocal learning. Evidently, Korea first of all learned from Japan that the primate city should be rail-oriented rather than car-oriented, and subsequently learned Japan’s extensive integration of urban rail with regional rail, its combination of local and express trains, its interest in rail technologies other than conventional subways, and so on. If Tokyo and Osaka were capable of building $120 million/km subways, Seoul would’ve picked that up. Instead, Seoul can do this but Tokyo and Osaka are evidently not learning.
In Europe, the same pattern holds. None of the most culturally dominant countries here has low costs. France and Germany’s construction costs are very average by global standards and on the high side by Continental European ones, and both have serious problems with how long it takes to build infrastructure projects. The stars of high-quality, low-cost construction in this part of the world are Southern Europe, Turkey, Switzerland, and Scandinavia. The first two are ridden by cultural cringe – nobody there other than a few railfans believes that they’re capable of doing better than Germany. And evidently, where Germany and France outperform Spain, for example in high-speed rail ridership, the Spanish discourse understands this and tries to correct the situation.
Switzerland and the Nordic countries are dicier, since they are rich and well-governed and everyone in Europe knows this. People in France and Germany even reference various Nordic models as examples to learn from, and, in contrast, the Nordic countries’ willingness to learn from non-Nordic examples is limited. However, these are all small countries that import culture more than exporting it. The vast majority of German culture is produced in Germany and not Switzerland; people in Germany are aware that Switzerland exists and is richer, but Germany’s size lets it get away with not learning. The Nordic countries, likewise, are small enough that other countries are not as regularly exposed to their ideas and therefore treat them as exotic more than as examples to learn from.
I bring up the issue of size, because it is so flagrant in the United States especially, and also in Britain. The US philosophy that economic or social might makes right is not done on a per capita basis, and practically every comparison to another country elicits the “we’re way bigger than them” excuse. Britain engages in the same excuse-making at every comparison to a European country smaller than Germany, France, Italy, and Spain, whereas these four it dismisses on a case-by-case basis; the Australian cultural cringe toward Britain is evidently not about per capita living standards, since Australia’s GDP per capita has been higher than Britain’s for most of the last 150-200 years, but rather about Britain’s greater size and historic status as a world power.
You may be wondering, maybe this is just a way to theorize around the fact that it really is easier to build infrastructure in a smaller country? But no. Turkey and South Korea and Italy and Spain are not small. Seoul is the second largest metropolitan area in the developed world, behind Tokyo and ahead of New York. The common factor to the lowest-cost countries in the world is not size, but rather their status on the periphery of the developed world, either economically or culturally.
Of course, peripheral status is not enough. Former colonies tend to have high construction costs, perhaps because they learn the wrong lessons from the developed world or from China. Italian wages and capital costs are by global standards approximately the same as German ones, so Italy can adapt German ideas where they’re superior, but Indian wages are so much lower and capital costs so much higher that it cannot blindly imitate Japan and expect success. In the developed world, too, we see failure, when countries learn from the wrong examples, that is Britain or the United States; Singapore has severe cultural cringe toward the Western world, but it finds it easiest to adapt British ideas out of familiarity rather than better Continental ones, in much the same way that reform proposals in the United States look to Britain and Canada rather than to Continental Europe or democratic East Asia.
The way forward must be to recognize this cringe, and know to look for ideas that do not obey the global social hierarchy. Southern Europe has a lot to teach Germany and France, and the Nordic countries are not exotic far north utopias but countries with real institutions that can be adapted elsewhere, and Turkey has a very efficient construction sector, and Korea has a lot to teach its former colonizer as well as the rest of Asia.
More to the point, the most dominant places in the world have very little left to teach others. Everyone knows what New York is like. There are many good things about New York, but we’ve done a decent job copying them. London, same thing. It’s time for New York and Los Angeles and Toronto and London to stop exchanging bad ideas and start learning from places that do not speak English as a first language, and not just from the world’s next largest language groups either.