| > 60 years ago the US built the interstate highway system. I think this is the point. The US spent roughly half a trillion dollars to build ~40,000 miles of road. There was a great deal of corruption as well as massive political conflict between federal, state and city agencies. Compare this to what the Nazis did in 1935 when the government hired 150,000 men and put them to work and finished construction five years later. The point here isn't that decentralization is bad. But it's not difficult to see why these large federalized states like the US, India, Brazil do infrastructure so poorly. > What's changed in the last 5 or 6 decades? The rise of highly sophisticated private actors that are, in fact, very, very good at extracting public monies. This is most visible in the military where the cost of outsourcing is so obscene that even Congress cannot deny it and now "in-sourcing" is a thing -- but really it afflicts almost everything the government does. This combination of decentralized, unsophisticated, weak government actors trying to match wits with highly sophisticated, numerate private actors is, in the end, a recipe for pillaging of the public treasury. (In fact one could argue that the 2008 global financial crisis is ultimately the best example of such pillaging.) Another way to look at this is to understand that what people call "cost disease" is the other side of the growing pricing power of private firms. And, ultimately, these firms can charge such high prices because they have worked very hard to guarantee that governments will pay them. (See eg Medicare where by law the program cannot negotiate prices.) |