All of these projects may still be good value, but the pattern of cost overruns they highlight should temper the view that any infrastructure project must be a winner in an era of very low rates. Moreover, an ill-considered infrastructure investment might create longer-term costs, from environmental damage to excessive maintenance requirements.
The case for increasing infrastructure spending in today’s low-interest-rate environment is still compelling, but considerable technocratic expertise will be needed to help compare projects and give realistic cost assessments. Creating a UK-style national infrastructure bank (an idea former US President Barack Obama had proposed) is one sensible approach. Absent that, the recent burst in infrastructure enthusiasm is likely to be a missed opportunity.
Kenneth Rogoff, professor of economics and public policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. The co-author of "This Time is Different: Eight Centuries of Financial Folly," his new book, "The Curse of Cash," was released in August 2016.