A CASE FOR TRADE-TESTED BETTERMENTS?

Planetizen contributor Todd Litman poses The Roadway Expansion Paradox.  "Motorists want expensive roadway expansions provided that somebody else foots the bill, but when required to pay directly through tolls, the need for more capacity often disappears. What should planners do?"  It's a bind a long time coming, and probably the long-established reliance on planners working under the belief that roads are internal improvements too important to be left to crass commercialism.  But if the Bastiat argument about living at the expense of others catches on outside libertarian circles, let us be cheerful!

When people purchase a motor vehicle they expect governments to provide roads for their use, and when those roads are congested motorists want bigger roadways, provided that somebody else foots the bill. However, if required to pay directly for the added capacity, the justification for those projects generally disappears. Motorists are like a rude restaurant guests who order the most expensive menu item but disappear when the check arrives, forcing others to pay.

What's amusing, though, is that Mr Litman ultimately sees the obvious.

After tolls (CA$3.15 for cars and CA$9.45 for trucks) were eliminated on Vancouver-area bridges in 2017, traffic increased about a third on the Port Mann Bridge, from 112,000 to 150,000 average daily trips, and 38% on the Golden Ears Bridge, from about 40,000 to 55,000 average daily trips.

In these and other examples, governments spent billions of dollars to subsidize highways, but the need for those projects generally disappeared if users are required to pay directly, evidence that most motorists are cheapskates who will choose alternative routes, modes or destinations to save a few dollars. This has bankrupted many private, for-profit highways.

A basic economic principle is that, to maximize efficiency and equity, consumers should “get what they pay for and pay for what they get” unless subsidies are specifically justified to achieve strategic goals. Urban highway expansion projects that cannot be financed by user fees are economically inefficient – their costs are greater than their benefits. This means that governments often spend two dollars to provide facilities that users only value at one dollar, and because roadway expansions induce additional vehicle travel, this increases external costs such as downstream congestion, crash risk and pollution emissions. As a result, these contradict other community goals and are bad investments.

Most people assume that traffic congestion can be solved by expanding roadways, but no government can afford to build enough lanes to meet all potential demand, and doing so is inefficient and unfair.

Private, for-profit highways are going to have trouble competing against publicly provided, tax-supported highways, but the taxing authority can never hope to raise enough money to provide the highways, and thus do we get those budget-busting bipartisan infrastructure bills every few years.  Ultimately, though, the Tragic Vision provides clarity.

Economists recognize that congestion reflects underpricing: driving is so cheap that it becomes inevitable. You can have free roads or you can have free-flowing traffic but it is economically infeasible to have both.

Urban highway expansions represent a huge public subsidy to a relatively small number of future users. Anybody who will not drive regularly on these new facilities should protest this inequity.

There are a number of other items in the public budget that also qualify as regressive transfers.  The beginning of wisdom in the infrastructure lobby might be with the understanding that there is no such thing as a freeway.