What drives up infrastructure costs so much in the US compared to other developed countries?


Regulations, unions, different jurisdictions blocking a project do happen in many other developed countries, but US price tags seem to be higher. Why does a NYC subway revamp cost so much more than doing the same thing in another global mega city like London?

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From a very basic point, given my limited knowledge in that specific industry, the main cause is the standard microeconomics ideal of Supply and Demand. In the US, specifically, many industries run based on this practice causing some prices or costs to skyrocket. In some industries, both in the US and abroad, there are regulations on the financial aspects of the labor/parts/import/etc. that may create a “standard” for the cost of a project. Again, I don’t know about the specific industry you’re quoting for either the US or Great Britain, so I’m not sure this is the cause for your scenario.

The workers have higher salaries. The regulations, as you mentioned also play a big part. For something like a subway, geology comes into play, and I believe Manhattan is built on rock that is hard and therefore difficult and expensive to drill and dig through. I’m not sure how that compares to other cities. Also, when you’re digging underground, you need to make sure you don’t destroy other important infrastructure that’s already there. I’d imagine that New York’s density makes this very difficult.

The US is **huge**. It’s bigger than India with a fraction the population. Much of infrastructure cost is distance, to go a long way you need a lot of track, and ties, and wires, and …

While the city limits of London are twice NYC, the subway goes out into Long Island and other places.

When you say “do the same thing”, I doubt that greatly. The US tends to put off inexpensive infrastructure projects in favor of big projects funded by the federal government. In the NYC case, it’s more desirable to wait and get the whole country to pay for subway projects than do cheap ones with NYC taxes.

One reason infrastructure costs so much in the US compared to other developed countries is that the US has a much larger land area to cover. Additionally, the US population is more spread out than in other countries, which means that there are more roads, bridges, and other infrastructure projects that need to be built in order to accommodate everyone. Finally, the US generally has a higher standard of living than other countries, which means that they expect their infrastructure to be of a higher quality, which also contributes to the higher costs.