Why the Public Sector Can No Longer Build
13th October 2010
The public sector can no longer build. It has tied itself in knots with regulations and interest group special deals, such as the Davis-Bacon sop to construction unions and an astonishing array of environmental assessments, payment rules, appeal rights for rejected contractors, and preference programs for minority-owned firms and small businesses, requiring an army of compliance personnel to administer. Dubious high-speed rail plans are another example: the United States will never be a major market because service would be cost-effective on only a few routes, but instead of buying trains cheaply from a high-volume foreign producer with economies of scale, the Obama administration’s stimulus funding has a 100% Buy American requirement (subscription may be required).