Procurement and Infrastructure Costs

Zachary Liscow, Will Nober and Cailin Slattery

No 31705, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Infrastructure costs in the United States are high and rising. The procurement process is one potential cost driver. In this paper we conduct a survey of procurement practices across the 50 states. We survey both employees at each state department of transportation (DOT) and the road builders that win contracts to build and maintain roads. With this survey we are able to create a new dataset of procurement rules and practices across the U.S. and understand what actors on the ground think drive costs. We then assemble a new dataset of project-level infrastructure costs. We correlate the survey practices with our new, detailed data on costs. We find that two important inputs in the procurement process appear to particularly drive costs: (1) the capacity of the DOT procuring the project and (2) the lack of competition in the market for government construction contracts.

JEL-codes: D44 H54 H57 H83 K40 L38 L91 O18 R42 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-com, nep-cta, nep-ger, nep-ppm, nep-reg, nep-tre and nep-ure
Note: IO PE LS POL PR
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Citations: View citations in EconPapers (4)

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