Infrastructure: Doing What Matters

Abstract

At the core of our paper Infrastructure: Defining Matters was the notion that a proper understanding of what “infrastructure” means is critical not only for those who make decisions as to whether, on what terms, and in what ways investments in infrastructure might be made but also for those whose lives and livelihoods – on an individual and collective basis – are affected or intertwined with those decisions. The definition we offered was one which focused on people; their individual and collective needs with a central concern with their ability to thrive in the society in which they live and as they would have that society be; the diverse ways in which it “looms large”; and with an eye less to the structures and facilities typically associated with infrastructure and more to the (infrastructure-related) enterprises, the human undertakings organized in diverse ways to meet those needs. Given our ultimate interest in providing a resource for pension fund investors we formulated what we viewed as a useful narrative (informed by that understanding) by which “any potential investment in an [infrastructure-related] enterprise and its calculus of financial risk and reward are ultimately linked through a chain of factors to the particular infrastructure-related goods and services that are produced and the means for doing so.” Not surprisingly that chain included both considerations relating not only to staff at the enterprise level as well other key suppliers and providers of highly inter-related services to that enterprise but also those individuals or groups who might be viewed as non-enterprise stakeholders.In our next paper, Infrastructure: Deciding Matters, our aim was to translate the foregoing formulation into more practical terms as it related to pension fund investment decision-making. More particularly it sought to offer a critical though constructive analysis of that process as defined by a leading U.S. public sector pension fund both in terms of the chain of factors discussed in Defining Matters and of the actual investments which that fund made, with an emphasis on the infrastructure-related enterprises which were represented in its portfolio. Among that fund’s statement of strategic objectives for its infrastructure investments was a commitment to “responsible investment.” Although it was articulated there in terms of responsible labor and environmental practices, the overall parameters the fund set for its decision-making encompassed the wider range of considerations referred to at the end of the preceding paragraph.In this paper our goal is to press the conversation about such considerations further. That is, not only in the case of that pension fund but also more generally, pension funds and other investors with similar commitments frame them in relatively general terms, not infrequently with references to broad-gauge formulations of organizations in which they participate which seek in certain ways to aid one another in the advance of those commitments. However, despite such efforts there has been, in our view, a lack of relevant and useful literature which explores in a serious and thoroughgoing way what are the relatively “hands-on” tasks which must performed well (enough) which offer a realistic prospect of meeting those obligations. It is the goal of this paper to contribute to that literature, building on the ideas and narratives of our preceding two ones.