A proposed beltway only rarely can be justified on the even partial basis that it will enhance the region's economic position." The study, which was prepared by Payne-Maxie Consultants, concluded that, "because any net gains are likely to be small, potential adverse impacts of beltway construction probably cannot be balanced by beltway-induced regional economic growth."
Shifting Activity Within a Region
In later years, other economists have reached similar findings. Professor Marlon Boarnet of the University of California at Irvine, for example, recently reviewed the literature on the economic productivity benefits of highways and concluded that, "Recent evidence suggests that, at the margin, highway infrastructure contributes little to state or national productivity." Striving to reconcile the apparent contradiction between his findings and the expectations of local developers and officials, Boarnet contends that while new roads are likely to create new economic activity for a limited area, they also tend to shift economic growth from one place to another within a metropolitan region.
This notion that highway investment shifts economic activity from one place to another is not new. In fact, some of John Kain's early work on the spatial mismatch theory included evidence on the link between highway construction and the migration of commerce and jobs to the suburbs. But what is significant is the preponderance of evidence that the economic benefits of highway construction in one community tend to come at the expense of other places within the same region.
This represents a serious challenge for transportation decision makers. First, they must somehow deal with the clear disconnect between the misguided expectation of benefits from highway investment and the actual performance of such projects at the regional level. Second, many academics and planners point out that these expectations often bias the transportation decision-making process to favor road building, because the benefits of new highways tend to represent a migration of activity rather than real economic growth.
Picking Winners and Losers
Perhaps the most serious issue emerging from our understanding of highways and the displacement of economic activity is the question of who benefits and who loses in the regional competition for transportation investment and economic growth. Typically, suburban areas are prospering at the expense of central cities, according to many scholars, including Buz Paaswell of the City University of New York. In his research on the New York City region, Paaswell argues that "Major relocations of jobs, housing and support activities to the suburbs have occurred at the expense of central cities. Investment in highways has facilitated this restructuring". What's worse, these central city losses tend to translate into regional losses as well, because many experts, such as Senior Economist Richard Voith of the Federal Reserve Bank of Philadelphia, argue that healthy central city economies are a key ingredient to regional competitiveness. Without a targeted approach to economic development that prioritizes overall regional health over intra-regional competition, investment strategies are likely to serve as weapons in the destructive "economic war" among cities and suburbs, regions, and states.
Fortunately, leaders in many metropolitan areas have demonstrated an understanding of these pitfalls by facing the regional economic reality of diminishing returns from highway investment. As many have argued, the new challenges facing our highly mature transportation system still revolve around ensuring convenient, efficient, and predictable access and mobility to enable the movement of goods, services and people. For most regions, this means cost effectively providing congestion relief, curbing runaway sprawl, and providing greater transportation choices. However, new conditions require new solutions, and roadway construction is becoming less useful compared to strategies that help us make more efficient use of our existing system, including infrastructure maintenance, intermodal connectivity, land use coordination, support for transit and non-motorized modes of transportation, technology improvements, and pricing.
TEA-21 provides the resources that regions need to implement these strategies.
In addition to its continued support for metropolitan governance, it authorizes higher levels of funding for programs like the Congestion Mitigation and Air Quality Improvement Program, the Enhancements Program, Transit programs, the Transportation and Community and System Preservation Pilot Projects and a range of other flexible programs that will help build stronger regional economies. The complex task of balancing investment and the ever changing needs of a mature transportation system certainly demands that they all be put to good use.
