by Dr Nader Naderpajouh, Senior Lecturer, RMIT University
With infrastructure set to lead a post-COVID economic recovery, Dr Naderpajouh from RMIT looks at the role of developing new infrastructure systems to face challenges and compares the current situation to the famous ‘marshmallow experiment’.
Increasingly we hear about economic recovery in response to the COVID-19 pandemic and its consequent recession.
The recovery revolves around stimulus packages at the global level such as the economic stimulus plan by the European Commission, at the country level such as the US or Australian Governments’ stimulus packages, or at the local level such as the economic recovery package by the City of Melbourne.
Within the response mechanisms there is often encouraging news about the focus on infrastructure. The focus on infrastructure is remarkable news, as infrastructure systems tend to be neglected in comparison to other competing priorities.
There is an old saying that nobody thinks about infrastructure systems such as sewerage or utility networks until they stop working.
In this context, we should be pleased that there is a potential for investment in infrastructure and politicians, corporations and communities can play a role in pushing infrastructure to the top of the agenda on any fiscal discussion including the stimulus package.
However, news of infrastructure investment within such stimulus packages often point to short-term economic gains such as employment and productivity impacts (productivity often referring to GDP). This should always be taken with a grain of salt.
A primary purpose of infrastructure systems is to serve the needs of communities and societies in the long term. They are often capital-intensive projects that have a substantial impact on societies and lock us in for decades.
Therefore, we should be very cautious and ensure that short-term economic gains such as employment and productivity do not jeopardise the selection of alternative infrastructure systems.
The selection of alternative infrastructure systems and prioritising investment is a complex process involving a range of criteria.
Theoretically, the core of a decision-making process is cost-benefit analysis that is also practically driven by the power relation between the proponents of the projects.
While the majority of cases include social and environmental criteria in addition to economic and technical criteria, historical trends suggest that market driven criteria often dictate the final selection of alternative infrastructure systems.
Therefore, in cases such as economic recovery, there is a need to give greater weight to social and environmental criteria. This is because investment in infrastructure is already providing market driven gains of economic recovery.
The marshmallow test
The temptation to sacrifice long-term quality of life driven by well-planned infrastructure versus short-term economic gains is hard for societies to resist.
The case of selecting infrastructure systems for economic recovery post-pandemic is similar to the marshmallow test.
The marshmallow test is a famous social science experiment on delayed gratification that was first conducted at Stanford University in the 1970s. In the study, children were put into a room by themselves with one marshmallow on a table in front of them.
The children were told that once the researcher left the room they could either eat the one marshmallow straight away, or wait a period of time until the researcher got back, and then they could instead have two marshmallows.
Organisations facing the urge of snapping back are sitting behind the desk and can’t take their eyes from the potential stimulus package in front of them.
But the communities who collectively weigh their decisions and consider the long-term implications for resilience and quality of life, will also enjoy the long-term benefits of the service of infrastructure that is designed to be fit for the communities’ needs and new environmental realities.
What can we do?
The difference is that unlike the kids in the marshmallow test that just need to wait to get their reward, organisations need to work hard to refine their selections. Here are my five suggestions for the way forward.
- There is a need to give extra weight to quality of life, liveability and resilience criteria in the selection of alternative infrastructure for investment, especially focusing on the priorities such as social equality. This is especially important as the infrastructure projects within the stimulus package are already satisfying economic needs of creating jobs and increasing productivity, therefore, they need to have higher focus on social and environmental criteria and less on market criteria to offset the high bias to market.
- These times are perfect windows for innovation. For example, we could have a proportion of the projects to be prioritised based on a different set of criteria (purely social and resilience oriented), and assign a certain proportion of the stimulus package to the projects that are prioritised in this separate list.
- We can encourage communities to develop shovel-ready projects, and invest in efforts to engage them in the development of projects. Major corporations and political parties use the post shock times very efficiently to drive their preferences. Communities can learn and can be assisted financially and technically to engage in the development and selection of their infrastructure systems through the stimulus package. This is the perfect time for community-driven projects, the ones that are often pushed back in normal situations. If a community needed an infrastructure system and had constantly faced challenges such as lack of budget, now they should vehemently pursue the stimulus package for their long due infrastructure needs.
- Another major point is the diversification of the economy, which will be based on diversification of related infrastructure. The stimulus package should target infrastructure systems that we do not fund in normal situations to diversify the economy.
- Maintenance and future-proofing of existing infrastructure is also very important. This is especially true given that they are not prioritised compared to new projects in normal situations because there is no ribbon cutting involved.
Considering all of these recommendations, the most important point is to make sure no processes and regulations are overlooked, and all the checks and balances in the processes are followed.
In the volatile environment of the new normal, we cannot afford low-quality infrastructure that is not well planned.
We must learn from Australia’s history of building defects, such as the combustible cladding issue and the poor execution of apartments, to ensure necessary processes are followed and that we do not compromise our long-term quality of life with solely focusing on short-term market driven economic benefits.