California Infrastructure Spending: the Seen and the Unseen

May 19, 2006Jun 19, 2006
1029 K Street<br /> Sacramento, California<br />


Dr. Sandy Ikeda
Mercatus Center Senior Affiliated Scholar,
Associate Professor of Economics at
Purchase College in
 New York 

From the ports of California’s coast to the fertile soils of the state’s interior, from the desks of Silicon Valley to the studios of Hollywood, it is not difficult to understand how California has become one of the largest economies in the world.   

But while California has spent the last generation living up to its reputation as a land of opportunity, the accompanying growth in population and commerce have begun to threaten some of the foundations of the state’s prosperity: namely, its infrastructure.   

All that California is has been built upon the schools, roads, water systems, hospitals and public safety institutions that support the state’s economy and culture.  All that California will become depends upon how those elements are maintained, enhanced and funded to meet the demands of a dynamic population and a global economy. 

Policymakers have been called upon to recognize that the infrastructure decisions of today shape California’s tomorrow.  As the state’s leaders contemplate spending billions to sustain the underpinnings of California’s rich social and economic legacy, it is vital that their choices reflect an understanding of the likely consequences surrounding infrastructure spending: both those that are evident and those that are hidden. 

By providing an economic framework for understanding infrastructure spending decisions, this course will bring to light some of the unseen consequences associated with large-scale infrastructure improvements and offer simple but important tools for evaluating projects of such magnitude.

Participants will address such questions as:

  • In an environment of limited resources, what must be sacrificed in order to achieve infrastructure improvement?
  • With regard to equity, who benefits and who does not benefit from a given infrastructure project?
  • Who pays for infrastructure improvement?  Is it important that those who benefit also pay?
  • How do the long-term costs and benefits of infrastructure spending compare to those in the short term?
  • In the case of infrastructure spending, how compatible are political interests with the general welfare?  Why are the “rules of the game” important?