09 June 2006

Whose infrastructure?

Having recently spent time in Bangkok, where quality of life has been almost wholly sacrificed to the car, I was interested to read about Fred Harrison's publication Wheels of Fortune: Self-funding Infrastructure and the Free Market Case for a Land Tax in the Financial Times (9 June). It makes a strong case for taxing the beneficiaries of infastructure development, who are invariably landowners. Increases in land values give a good indicaton of the benefits of infrastructure investments, but they also supply a just way of financing their costs. Needless to say, this doesn't happen. In most countries, including Thailand, infrastructure development generates windfall gains for existing landowners. Some financial gains probably do percolate down to everyone else, but randomly and at huge non-financial cost in the form of the destruction of communities, accidents, noise pollution and air pollution.

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