Infrastructure : the Social Value of Shared Resources (Introduction)

Infrastructure resources are at the center of many contentious public policy debates, ranging from what to do about our crumbling roads and bridges, to whether and how to protect of our natural environment, to patent law reform, to electromagnetic spectrum allocation, to providing universal health care, to energy policy, to network neutrality regulation and the future of the Internet. The list could go on and on. Although the policy arenas may seem unrelated, all of them are, to some extent, the same. Each involves a battle to control infrastructure resources, set the terms and conditions under which the public gets access, and determine how the infrastructure and various infrastructure-dependent systems evolve over time.The battle is joined in each of these areas, with some groups arguing strongly for recourse to private property solutions and other groups arguing strongly that such an approach would be fatal. These groups draw on a broader intellectual debate about the merits of private control over (or open access to) various types of resources. The intellectual debate takes place in a number of fields, including law, economics, and political science. On the private control side, there is robust economic theory in support of private ordering via markets with minimal government involvement. By contrast, on the open access side, there is a frequent call for protecting the “commons,” but the theoretical support for this call is underdeveloped from an economics perspective.This book advances strong economic arguments for managing and sustaining infrastructure resources as commons. Economics has become the methodology of choice for many scholars and policymakers in these areas. The book offers a rigorous economic challenge to the prevailing wisdom, which focuses primarily on problems associated with ensuring adequate supply. This book explores a set of questions that, once asked, seem obvious: what drives the demand side of the equation, and how should demand-side drivers affect public policy? Demand for infrastructure resources involves a range of important considerations that bear on the optimal design of a regime for infrastructure management. The book identifies resource valuation and attendant management problems that recur across many different fields and many different resource types, and it develops a functional economic approach to understanding and analyzing these problems and potential solutions