Inequality and Social Policy Seminar presentation by Alisha Holland, Associate Professor of Government, Harvard University.
Abstract: Infrastructure is at the heart of contemporary development strategies and promises to improve social welfare.  Yet short time horizons are thought to impede infrastructure provision in democracies.  Why do elected politicians invest in infrastructure projects that will not be completed during their time in office?  The answer depends on understanding what infrastructure is and does in politics.  I argue that the political rewards from infrastructure projects come from the associated contracts.  Like many goods and services, infrastructure investments are neither fully privatized, in the sense of transferring ownership to the private sector, nor fully public, in that the state directly builds projects.  Governments instead contract out to the private sector.  Politicians use their discretion in the contracting process and pursue public-private partnerships (PPPs) to secure campaign donations, hide project costs, and move project decisions away from legislatures.  Detailed evidence from 1,000 large infrastructure contracts, judicial investigations and leaked financial documents demonstrate why politicians invest in infrastructure and favor PPP models.  Qualitative interviews with politicians, bureaucrats, and community leaders in Latin America reveal how projects increasingly serve the interests of private contractors and exacerbate the social and territorial inequalities that infrastructure investment are intended to address.