Statecraft What Is America’s Infrastructure Cost Problem?
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Sep 17, 2025 Zach Liscow, a Yale Law School professor and former Chief Economist at the Office of Management and Budget, sheds light on America’s staggering infrastructure costs. He discusses the reasons behind these expenses, specifically the regulatory and procurement hurdles that inflate prices. Comparing subway construction costs, he points out that New York’s expenses far exceed those of Paris. Liscow explains how retiring engineers and talent retention issues exacerbate the problem, calling for better data and reforms to streamline processes and improve outcomes.
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Four Core Drivers Of High Costs
- Infrastructure cost drivers group into four main buckets: permitting, procurement/procedure, personnel, and data.
- Tackling all four is necessary because different projects are driven by different dominant factors.
Permitting Raises Costs Beyond Paperwork
- NEPA and litigation add years to project timelines and push project teams to add expensive mitigations.
- Those defensive changes can multiply construction costs beyond the direct cost of producing environmental reports.
Permitting Explains Some But Not All Cases
- Permitting is critical for above-ground linear projects with visible impacts, but it explains little about extremely expensive underground projects.
- For tunnels and similar works, other factors like procurement, personnel, and weak data explain cost gaps.