Infrastructure and Opportunity Costs

On a recent trip to the US , I could nt help notice how good roads lead to such huge incremental benefits.

Laying down a good road or bridge gives payoff in lesser fuel consumption, people able to live further away so better urban planning,fewer accidents, lower rates of auto insurance, better environmental health .

All these are opportunity costs that cant be measured short term and are at best an estimate in long term .China’s new infrastructure thus gives it an edge over less developed, or less well maintained infrastructures.

Costs of a road in terms of taxes, fiscal deficit are immediate. Thats why fewer and fewer political leaders seem to be explicitly promising better roads and robust bridges as an election slogan.

Author: Ajay Ohri

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