Budget and Transportation: Plutarch Parallel Lives

13 of October of 2011

Lucius Mestrius Plutarchus, a.k.a. Plutarch (46 – 120 AD) wrote in the late 1st century his “Parallel Lives”, a series of biographies of famous men arranged in tandem (one Greek and one Roman) to illuminate by comparison their common moral virtues or failings. The list includes pairs of mythical heroes such as Theseus (the founder of Athens) and Romulus (the founder of Rome), and historical leaders as Alexander the Great and Julius Caesar.

Nowadays, contemporary topics can be compared in the very same way. I guess that if Plutarch was to be our contemporary and devote his time to transportation topics, he might well have chosen to compare the debate on fixing the government budget vs. the debate of fixing the transportation infrastructure challenge (I also suppose with this job he would have remained unknown to posterity)

The hottest political-economic debate in these days and in the weeks to come is how to fix the 2012 Federal Budget. All parties appear to agree in the need to find a long term sustainable economic policy able to drive America out of the crisis creating jobs and boosting the economy; and at the same time break the vicious circle of ever growing deficit and government debt.

Where the parties disagree is on how to achieve that goal. Some focus on the revenue side, claiming that higher taxes are needed, arguing that funds raised through higher taxes will be poured back to the economy through government programs and on the long term will increase job creation and economic growth, which on its turn will allow reducing deficit and government debt. Others focus on immediate spending cuts, which they see as the only certain way of tackling the deficit and debt issues. This approach might have a short term negative social and economic impact (as government programs would have to be scaled down), but austerity fighters insist that there is unnecessary and inefficient government spending that can be avoided or reduced, and that such initiative would not have a negative social and economic impact, rather the opposite. In other words, they claim that the long term objective of economic recovery can be better achieved with less spending. Both positions are supported with well elaborated arguments, and probably both are partly right and partly wrong.

What is surprising when comparing these discussions with the debate on transportation is that most discussions and arguments on the later turn around funding, and very few on efficient spending. I have attended this year four different forums and conferences on transportation in America. When publicly discussing how to fix congestion and how to solve the transportation challenge, the most common debate one hears is on how to find the financial resources that are needed to fix transportation at all levels. The point is elaborated looking at alternatives such as raising gas taxes or registration fees, implementing fees per mile traveled, creating new financial tools and increasing allocation to the existing ones, using pension funds and private investors to fund infrastructure, etc. It all relates to how to increase funding, only looking at the revenue side of this coin.

But I barely recall one or two speakers or panelists who have openly developed ideas on how to improve efficiency on spending (in other words, how to do more with less) and still tackle the congestion and transportation challenge. It is usually admitted as a given truth that the only way of reducing spending on infrastructure is to avoid or postpone the construction of much needed projects.

Aren’t there other alternatives to develop infrastructure in a more efficient way? This question deserves at least the same attention as the one on how to find the missing funds. Some of us strongly believe that yes, there are more efficient ways of delivering infrastructure and relieving congestion. And it does not necessarily mean that you are going to get a Chevy instead of the Cadillac you were looking for. The fact is that when interests are adequately aligned, when all parties in a deal are incentivized to achieve the same ultimate goal – solving congestion and providing a high quality service to drivers-, when infrastructure contracts focus more on performance than in prescription, projects can achieve the same goals with lower spending.

Just as an example, Allen Consulting developed in 2007 an analysis with the University of Melbourne looking at efficiency in the development of infrastructure, using a sample of 54 P3 and traditional DBB projects. They found significant cost advantage for the P3 model (average net cost over-run for PPP’s 1% vs. 15% for traditional procurement), and equally as important, better timely completion with the P3 model (3.4% ahead of time on average vs. 23% percent behind time for traditional project delivery)

Increasing funding in efficient ways that limit impact in government budget –as, for example, the Tifia program does- is certainly a sine-qua-non condition to close the transportation gap. But it would be irresponsible to see it as THE only solution. It must be accompanied by initiatives that reduce spending whilst at the same time achieving the same transportation and congestion relief goals.

It is fascinating to read how Plutarch develops his comparison between the lives of Theseus and Romulus: “Theseus of his own free will, and without any compulsion, (…) longed to accomplish heroic deeds: whereas Romulus was an exile and in the position of a slave; the fear of death was hanging over him if unsuccessful, and so, as Plato says, he was made brave by sheer terror, and through fear of suffering death and torture was forced into doing great exploits”[1]

As an industry, we should all use our best endeavors to solve the transportation challenge in the Theseus way, rather than waiting too long until we have no other option but to do it the Romulus way.


[1]Works of Plutarch, The Lives of the noble Grecians and Romans, Volume I

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