Financing Transport Infrastructure: The Effects of Institutional Durability in French and American Policymaking

Abstract

This article compares the finance of transportation infrastructure in France and the United States in order to test the concept of institutional durability as an intervening variable that can account for different patterns of industrial development. Institutional durability is defined as the degree to which the fiscal norms and principles established in agreements between government, industry, and financial investors go on to exert influence over subsequent attempts to reorder the allocation of collective economic burdens and benefits. Two historical episodes of infrastructure development, mid‐19th century railroad construction and the creation of inter‐city highways between the First and Second World Wars, will be evaluated to identify and differentiate the effect of institutional durability upon American and French transportation policy.French infrastructure finance is shown to exhibit a limited institutional durability which has facilitated the historical adjustment of both rail and road infrastructure along convergent fiscal terms. US infrastructure development is seen to possess a much greater institutional durability which has encouraged the divergence of fiscal arrangements set up at different periods of time. The resulting accumulation of incompatible and often competitive arrangements appears to have locked the US into conflicting means of transport development that make a fiscally coherent transportation policy very difficult to achieve. No such institutional obstacle emerges in French transport policy where the terms of macroeconomic decision‐making are seen to be integrated.