
Typical infrastructure investments fail to deliver positive risk-adjusted return [pdf] - apsec112
https://arxiv.org/ftp/arxiv/papers/1609/1609.00415.pdf
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londons_explore
It seems almost impossible to measure the "return" on most government
investments...

How much exactly did the economy benefit from building a new road?

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leetcrew
probably impossible to do with great precision, but you can at least estimate
the direct impact. it's important to do this, because there are always many
more projects that would be nice to do than the government can actually pay
for. above all, the project has to at least be better than simply distributing
the money as cash to the citizens, or just not having taxed them so much in
the first place.

I wouldn't think roads are quite so tricky. there are a few potential benefits
of a new road: land on either side of the road is made viable for
homes/businesses, more people can get from A to B, people can get from A to B
faster. you can probably make a decent prediction here based on current
building and traffic trends. potential downsides of a new road: future
obligation to maintain it, increased emissions, other environmental impacts. a
government ought to have a pretty good idea how much it costs to maintain a
certain type of road, considering it is already doing that. a decent estimate
for emissions should be obtainable from extrapolating current traffic
patterns. other environmental impacts (floodplain, watershed, roadkill, etc.)
are probably the hardest to quantify.

in any case, the estimate doesn't have to be perfect. you just need the low
end of the error bar to be comfortably above breaking even on the investment.

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xiphias2
I'm happy that government contracts are being analyzed as investments, but the
goals are generally different:

\- Infrastructure investments inside a nation can make workers depend more on
government and can get politicians elected/reelected

\- As they are simple businesses without many risks, they are a great way for
corruption, which helps politicians to keep and strengthen their power.

The investments should be viewed as getting ROI for the politicians themselves
as well.

As I'm living through a democracy turning into a dictatorship, I can attest
that so far it works.

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Lemmih
Where do you live?

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xiphias2
I live in Hungary, the country where a new empty soccer stadium is built in
every month.

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sideshowb
Title should add "in China"

Not saying that's true or false elsewhere, indeed I'd be interested to know.

