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A hard-to-capture cost factor is keeping highly used services operational or replaced while doing work on it. A super-fancy new subway with lots of stations in

A hard-to-capture cost factor is keeping highly used services operational or replaced while doing work on it. A super-fancy new subway with lots of stations in Shenzhen where people weren't already taking trains and expecting to use stations for their daily commute will be much cheaper than disrupting a line service to open a new station in London or New York City. Replacement bus bridge services, network-wide service advisories, staff and enforcement training, are all costs that are not easy to quantify or justify because it doesn't directly manifest in the construction of the infrastructure. Of course there are other factors that vary a lot across cultures: * China's heavy-handed governmental decision-making leaves no room for inefficiencies via neighborhood antagonism towards the constructions or zoning; * Car culture differences create different magnitudes of popular roadblocks to investment in non-automobile infrastructure, which can result in large expenditures on lobbying and campaigning; * Significantly more arbitrary middlemen making their way into the process because of "let the market figure it out" does, in fact, create some process inefficiencies in supply chains and contract pipelines. Few countries are as aggressively market-based for things meant for public good as the US.

granshaw 7y ago
> A hard-to-capture cost factor is keeping highly used services operational or replaced while doing work on it. Anyone who does any kindof "building" (whether it be software engineers making schema changes, or a general contractor adding to an existing house vs building from scratch) knows this intimately, so really it shouldn't be any kind of surprise at all
- rafiki6 7y ago
  But to the article's original point, the people conducting the research to prepare these reports are non-experts. So they wouldn't even know where to look for these figures.
- keerthiko 7y ago
  Exactly. It's super evident to anyone who works on maintaining SaaS that is in production with at least a hundred users at any given time using it in real-time when you are trying to push features or fixes that even going down for a minute will result in serious service reputation damage. We engineer a lot of reusable scaffolding and reporting tools to modify our services in-situ with minimal/no disruption because it is a huge priority. Operating on public infrastructure is the closest real-world parallel. But to most people who work jobs where their choices don't directly influence customer service uptime (including a construction worker or a surveyor of construction for the same public works, as opposed to the project coordinator/planner/senior architect/engineer), this is an opaque cost.
rafiki6 7y ago
> Significantly more arbitrary middlemen making their way into the process because of "let the market figure it out" does, in fact, create some process inefficiencies in supply chains and contract pipelines. Few countries are as aggressively market-based for things meant for public good as the US. This times a 1000. This is a huge factor that I think is missing. The market will just price in the labor required of all the people to make something happen. In other governments/countries, the heavy-handed government tends to basically say "We are paying this much, who wants to do it?". And they really only pay that much. There's no room for cost over runs. On the flip-side, a lot of times the amount is established by some bureaucrats friend before the project is even set to take off and the criteria are design to favor that friend and their companies price and strengths.
- asdff 7y ago
  Profit is also priced in of course. You pay a public employee $1 to do $1 worth of labor, all swell. To get that same $1 worth of labor out of the private contractor, you need to pay $1.30 so that their C level employees get paid C level and their shareholders see exponential growth. It's parasitic and public funds should not be allowed to be skimmed by this by these bad actors.
  - tnel77 7y ago
    You are correct that private companies are adding cost due to the desire to make money. I think the issue with the “public employee $1 to do $1 worth of labor” is that you get a level of complacency with government employees that can be a huge black hole for project funding. It’s possible, though not always the case, to allow a private company to make a profit while still getting more for your money. If the private employee is more efficient, they may need less hours to accomplish the same task. So the hourly rate may be higher, but there could be less hours in the equation to make the overall cost the same or lower. In theory at least.
AnthonyMouse 7y ago
> Significantly more arbitrary middlemen making their way into the process because of "let the market figure it out" does, in fact, create some process inefficiencies in supply chains and contract pipelines. Few countries are as aggressively market-based for things meant for public good as the US. It's kind of disingenuous to blame "let the market figure it out" for government contracting problems that are attributable almost entirely to political corruption. Governments buy a million things from the private sector using contract bidding with reasonable requirements, and then the low bidding napkin vendor turns out to be Walmart or some direct napkin producer in the midwest, the state spends 0% of its overall budget on napkins, and nobody pays any attention to the successful process because it's 0% of the overall budget and there is nothing to complain about. The problem is that it's all too easy for a corrupt politician to purposely add a contract requirement that only a specific contractor can satisfy, with the predictable consequences for the level of competitive bidding and the contract price. But that's not fundamentally any different than politicians pandering to government workers unions by "creating jobs" supervising people who are digging holes and filling them back in, even if they're all direct government employees. The people receiving the money have a much larger incentive to spend their influence on that specific project than the average taxpayer, because it constitutes 100% of their income rather than 0.5% of their tax dollars, only then there are a hundred such projects and it looks like half the budget is waste (because it is). The problem is probably made worse by the separation between revenue and spending. We have one institution in charge of generating money (tax collector) and then a hundred separate ones in charge of spending it, but the spenders aren't accountable for the money and there is a lot of buffer because the government as a whole can just spend more than it collects and issue debt to make up the rest of it. Which means there is nobody really in charge of making sure the taxpayer is getting good value for money in any given project. What we could do is to elect the heads of the various government departments (e.g. transportation, education, law enforcement) and have them pull revenue from the same source (e.g. sales or income tax), but the tax rate is set directly based on how much money they actually spend. In other words, they set their own individual budgets, but they also have to individually directly answer to taxpayers. But the general legislature still has to approve the overall budget to keep any of them from getting out of hand. Then if the head of transportation doubles the transportation budget to spend it on corruption and waste, leading directly to a 2% increase in the sales tax (and doesn't get vetoed by the general legislature), he's out on his butt in two years, and is more likely to actually end up in jail because now more people are paying attention.
WanderPanda 7y ago
> Significantly more arbitrary middlemen making their way into the process because of "let the market figure it out" does, in fact, create some process inefficiencies in supply chains and contract pipelines. Few countries are as aggressively market-based for things meant for public good as the US. "let the market figure it out" is high variance, low bias => good in the long run (probably the only stable choice) "let bureaucrats figure it out" is low variance, high bias => more reliable in the short run but escalates in the long run It turns out most people who influence this decision (politicians etc.) have short-term interests and no long-term responsibility so countries with a weaker constitution (like here in Europe) tend to rather go with the latter one...

granshaw 7y ago

> A hard-to-capture cost factor is keeping highly used services operational or replaced while doing work on it. Anyone who does any kindof "building" (whether it be software engineers making schema changes, or a general contractor adding to an existing house vs building from scratch) knows this intimately, so really it shouldn't be any kind of surprise at all

rafiki6 7y ago
But to the article's original point, the people conducting the research to prepare these reports are non-experts. So they wouldn't even know where to look for these figures.
keerthiko 7y ago
Exactly. It's super evident to anyone who works on maintaining SaaS that is in production with at least a hundred users at any given time using it in real-time when you are trying to push features or fixes that even going down for a minute will result in serious service reputation damage. We engineer a lot of reusable scaffolding and reporting tools to modify our services in-situ with minimal/no disruption because it is a huge priority. Operating on public infrastructure is the closest real-world parallel. But to most people who work jobs where their choices don't directly influence customer service uptime (including a construction worker or a surveyor of construction for the same public works, as opposed to the project coordinator/planner/senior architect/engineer), this is an opaque cost.

rafiki6 7y ago

asdff 7y ago
Profit is also priced in of course. You pay a public employee $1 to do $1 worth of labor, all swell. To get that same $1 worth of labor out of the private contractor, you need to pay $1.30 so that their C level employees get paid C level and their shareholders see exponential growth. It's parasitic and public funds should not be allowed to be skimmed by this by these bad actors.
- tnel77 7y ago
  You are correct that private companies are adding cost due to the desire to make money. I think the issue with the “public employee $1 to do $1 worth of labor” is that you get a level of complacency with government employees that can be a huge black hole for project funding. It’s possible, though not always the case, to allow a private company to make a profit while still getting more for your money. If the private employee is more efficient, they may need less hours to accomplish the same task. So the hourly rate may be higher, but there could be less hours in the equation to make the overall cost the same or lower. In theory at least.

AnthonyMouse 7y ago

> Significantly more arbitrary middlemen making their way into the process because of "let the market figure it out" does, in fact, create some process inefficiencies in supply chains and contract pipelines. Few countries are as aggressively market-based for things meant for public good as the US. It's kind of disingenuous to blame "let the market figure it out" for government contracting problems that are attributable almost entirely to political corruption. Governments buy a million things from the private sector using contract bidding with reasonable requirements, and then the low bidding napkin vendor turns out to be Walmart or some direct napkin producer in the midwest, the state spends 0% of its overall budget on napkins, and nobody pays any attention to the successful process because it's 0% of the overall budget and there is nothing to complain about. The problem is that it's all too easy for a corrupt politician to purposely add a contract requirement that only a specific contractor can satisfy, with the predictable consequences for the level of competitive bidding and the contract price. But that's not fundamentally any different than politicians pandering to government workers unions by "creating jobs" supervising people who are digging holes and filling them back in, even if they're all direct government employees. The people receiving the money have a much larger incentive to spend their influence on that specific project than the average taxpayer, because it constitutes 100% of their income rather than 0.5% of their tax dollars, only then there are a hundred such projects and it looks like half the budget is waste (because it is). The problem is probably made worse by the separation between revenue and spending. We have one institution in charge of generating money (tax collector) and then a hundred separate ones in charge of spending it, but the spenders aren't accountable for the money and there is a lot of buffer because the government as a whole can just spend more than it collects and issue debt to make up the rest of it. Which means there is nobody really in charge of making sure the taxpayer is getting good value for money in any given project. What we could do is to elect the heads of the various government departments (e.g. transportation, education, law enforcement) and have them pull revenue from the same source (e.g. sales or income tax), but the tax rate is set directly based on how much money they actually spend. In other words, they set their own individual budgets, but they also have to individually directly answer to taxpayers. But the general legislature still has to approve the overall budget to keep any of them from getting out of hand. Then if the head of transportation doubles the transportation budget to spend it on corruption and waste, leading directly to a 2% increase in the sales tax (and doesn't get vetoed by the general legislature), he's out on his butt in two years, and is more likely to actually end up in jail because now more people are paying attention.

WanderPanda 7y ago