Why are governments often unwilling to undertake (a) new infrastructure projects, (b) maintenance projects?
economic questions Case 2
1. Why are governments often unwilling to undertake (a) new infrastructure projects, (b) maintenance projects?
2. Is a program of infrastructure investment necessarily a Keynesian policy? What accelerator effects would you expect from infrastructure investments?
3. Explain the difference between the ‘spill-out’ and ‘pull-in’ effects of different types of public investments in a specific location. Is it possible for a project to have both effects?
4. What answer would you give to the teacher who asked the following question of US Treasury Secretary, Larry Summers? “The paint is chipping off the walls of this school, not off the walls at McDonald’s or the movie theatre. So why should the kids believe this society thinks their education is the most important thing?”
5. Explain the “bridge to nowhere” problem and it’s solutions? Why is the ‘castle in the air’ element of private projects during a boom an example of the fallacy of composition?
Answer preview Why are governments often unwilling to undertake (a) new infrastructure projects, (b) maintenance projects?
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