Statecraft What Is America’s Infrastructure Cost Problem?
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Sep 17, 2025 Zach Liscow, a Yale Law School professor and former Chief Economist at the Office of Management and Budget, sheds light on America’s staggering infrastructure costs. He discusses the reasons behind these expenses, specifically the regulatory and procurement hurdles that inflate prices. Comparing subway construction costs, he points out that New York’s expenses far exceed those of Paris. Liscow explains how retiring engineers and talent retention issues exacerbate the problem, calling for better data and reforms to streamline processes and improve outcomes.
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Engineers Drive Big Cost Differences
- Losing experienced state engineers sharply increases project costs; a 1% additional retirement raised costs by ~4.5% in their study.
- Hiring higher-quality engineers yields large savings that can exceed their salary costs several times over.
Two-Decade Shrinkage Of State DOT Capacity
- State DOTs shrank headcount over two decades while taking on more responsibilities, often due to fiscal pressures after crises.
- Short-term cuts to staff produced long-term capacity loss that raises outsourcing and project costs.
Talent Boosts Competition And Lowers Bids
- Skilled state engineers increase competition by attracting more bidders and simplifying procurement.
- Low bidder counts (often ~3) raise prices, making talent that brings bidders highly valuable.