Policy Quarterly Volume 6, Number 4
Nations cannot flourish without well-designed physical infrastructure. This includes transport infrastructure (e.g. roads, railway networks, cycle paths, seaports, airports and navigation systems), water management infrastructure (e.g. water supply, sewage collection and disposal of waste water, drainage systems, flood control and irrigation), energy infrastructure (e.g. generation plants, power grids and pipelines), and communications infrastructure (e.g. phone services, fibre-optic cable, undersea cables and satellites). Infrastructure is critical not only for the production and distribution of goods and services – and therefore for economic development and prosperity – but also for social interaction and connectedness, environmental protection and sustainability, and human well-being. Yet the provision of infrastructure poses many complex and challenging policy issues. For instance, what is the appropriate level and mix of infrastructure investment? How should such investment be funded and managed? How should access to, and use of, infrastructure be rationed and priced? What discount rate should be used in evaluating the costs and benefits of particular infrastructure projects? Is it possible to avoid inefficient forms of path dependence, such as long-term ‘lock-in’ to antiquated technologies or undesirable patterns of human settlement? To what extent should infrastructure be designed to cope with potential long-term developments, such as the impacts of climate change (e.g. more severe storms, sea level rise, and heat waves)? And what lessons are there from both domestic and international experience about the strengths and weaknesses of different decisionmaking models with respect to infrastructure investment and management? In particular, is it possible to construct policy processes that reduce the tendency for negative externalities to be underpriced and for users of infrastructure to be inappropriately subsidized? These and related questions were the subject of a well-attended workshop hosted by Motu and the Institute of Policy Studies on 13 July 2010 in Wellington. The workshop brought together researchers, policy advisers and decision makers from around the country. Amongst other things, the event provided an the opportunity to consider the findings and policy implications of a major research programme on infrastructure issues led by Motu and funded by the Foundation for Research, Science and Technology.
This special issue of Policy Quarterly includes most of the papers presented at the infrastructure workshop. It commences with two scene-setting contributions, both by Arthur Grimes. These papers summarize the aims of the research programme and its main empirical findings, and explore some of the major policy issues generated by the research – in particular, the problems of uncertainty, discounting, strategizing and priority-setting. Following this are five contributions covering a range of policy issues: John Boshier assesses various methods for evaluating infrastructure proposals; Stephen Selwood addresses the problem of project prioritization and the lessons from New Zealand’s experience (especially in the transport sector); Andrew Coleman explores the problem of path dependence created by specific urban forms, and, with particular reference to Auckland, considers the challenge of increasing public transport use in low-density cities; Lew Evans discusses problems of decisionmaking with regard to infrastructure investments in the context of various kinds of uncertainty, such as rare events (like major earthquakes), and volatility in economic conditions (including uncertain demand for infrastructure services); Colin Crampton describes the approach of the New Zealand Transport Agency to planning and providing land transport infrastructure, using the state highway network as an example; and Michael Deegan outlines Infrastructure Australia’s approach to improving the coordination and quality of infrastructure investment across the Tasman.
Collectively, these papers provide a rich source of information, evidence and analyses. They contain much wisdom, insight and practical advice. They deserve careful attention by all those involved in the funding, maintenance and governance of this country’s infrastructure.
This issue of Policy Quarterly also includes three articles on three very different topics. First, Todd Bridgman explores the (limited) contribution of university academics in New Zealand to public debate about the global financial crisis (GFC) during 2008-09. His analysis is sobering. Despite the gravity of the GFC and the significant reservoir of relevant knowledge within the academic community, the public voice of the universities was decidedly muted. Few of those with relevant expertise – whether in accounting, economics, finance, law, management and public policy – contributed to public discussion. Instead, public commentary was led from elsewhere, in particular by economists employed by the major banks. Bridgman examines the reasons for the relative silence of academics, why this is inconsistent with the ‘critic and conscience’ role of
universities, and what should be done to rectify the problem.
Harshan Kumarsingham poses a very different question: has the move to proportional representation since 1996 really diminished the power of the executive, including that of the prime minister, or does New Zealand remain, in effect, an ‘elected dictatorship’? Drawing on various recent examples, Kumarsingham argues that the power of the executive remains very much alive, and goes on to consider some of the ways in which this power might be better checked and fettered. The prospects, however, do not look good – all the more so given recent events, such as the enactment in September 2010 of the Canterbury Earthquake Response and Recovery Act which, amongst other things, gives ministers the power to exempt, modify or extend virtually any statute by Order-in-Council in pursuit of the general purpose of facilitating a response to the earthquake.
Finally, Clair Mills explores how economic recessions affect health outcomes, and in particular the implications for inequalities in health. Overall, the evidence suggests that recessions impact negatively on the key determinants of health, such as employment and income, and that the effects fall differentially on population groups, with the least advantaged suffering most. Appropriately targeted policy measures can help to mitigate such outcomes, but fiscal pressures and limited political will are likely to constrain their application. Reducing health inequalities, therefore, can be expected to remain a perennial challenge.
Published in November 2010