Short Term Local Benefits from Public Infrastructure Investment

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Economics | Social and Behavioral Sciences


Ernest Diedrich, Economics


In the wake of a string of major infrastructure failures in the United States, such as the August 1, 2007 collapse of the I-35W bridge in Minneapolis, a great deal of attention from the media and the public at large has been placed on the nation's crumbling infrastructure. One aspect of public infrastructure investment that tends to elude the public's watchful eye, however, is one that many are quick to take for granted: the nation's sewer and water systems. One of the main difficulties in acquiring resources to upgrade these projects is the lack of any defined short-term benefits that may be present in, for example, providing subsidies for a new factory to bring jobs to the community. Using data from city audit reports, the Bureau of Labor Statistics, the Bureau of Employment Analysis, the American Community Survey, and statistics a number of western and central Minnesota cities, this document seeks to compare levels of new water and sewer investments by Minnesota communities with a variety of other indicators. The goal of this project is to determine if these investments have politically appealing short run benefits in the form of attracting new business activity to the community, making infrastructure upgrades viable in the short term.