William Watson: Montreal tests the value of infrastructure—the hard way
The Ottawa-based Public Policy Forum was holding a policy discussion today in Montreal on the topic “Shovel Worthy? Doing Infrastructure Smarter.” The term “shovel worthy” is an interesting and useful twist on the usual “shovel ready,” used to describe projects governments want to bring online (to mix the metaphor) whenever the economy runs into strong macroeconomic headwinds (mixing it again).
To begin with, “shovel” itself is inappropriate. We hope nobody’s literally using shovels these days. As we discussed in my history of economic thought class the other day, one reason the early classical economists all go on about the prohibitive cost of land transport is that in the middle of the last millennium roads actually were built with shovels, hundreds of them, and therefore took lots of time and money to complete. In the 21st century we want projects that are front-end-loader ready or caterpillar-ready or blast-ready.
Governments that fail to respond rapidly to a downturn by getting their shovel-ready projects going quickly enough often face sharp criticism.
But is it really a good way to run a society to have several big and presumably important projects ready and waiting but only start them up when times go bad? If they’re good projects, why hold back? If they aren’t good projects, why are bad times a good excuse to go ahead with them?
For my money—and for taxpayers’ money, too—“shovel worthy” is therefore a much better phrase than “shovel ready.” We want our infrastructure projects to make sense. Perfect prediction is never possible but, given the overpowering contractor and interest-group pressures surrounding such projects, the rest of us should be reasonably sure the benefits will exceed the costs by enough to justify using resources for whatever the project is.
Unfortunately, I wasn’t able to attend today’s policy discussion. But I hope that as participants made their way to the discussion site in the CIBC building on Boulevard René Lévesque they had a good look around. And I hope they didn’t arrive too late. This fall, Montreal is undergoing a natural experiment testing the benefits of urban transportation infrastructure. It seems just about every downtown street is under repair. To cross at any major intersection now, pedestrians have to do what may have been common before traffic lights came in, namely, wait for permission from a traffic cop.
The area around McGill University, where I teach, is particularly hard hit. Major streets on the west, north and south sides of campus are completely dug up (they are, if you know Montreal, McTavish, Docteur Penfield and Sherbrooke, respectively) while for a couple of days last weekend the major artery on the east side of campus—University Street—was also blocked off, so that, as far as I can tell, it was impossible for vehicles to get onto campus.
I hope some smart econometrician is using our Construcsha-geddon to test the value of infrastructure. During the construction, which is supposed to last the better part of a year, we downtown Montrealers are being seriously deprived of our road and sidewalk infrastructure. Once it’s all done (assuming that ever happens—fingers crossed!) we’ll have all our infrastructure back. If it’s really worth what its boosters say it is, Montreal’s GDP is about to soar.