Oops, they did it again

Since I began teaching in De La Salle University in 1998, it seems that every year some portion or other of that stretch of Quirino Avenue (in Manila) between Zamora Street and Taft Avenue has had to be repaired. Each time such a road works project is undertaken, untold grief and suffering are inflicted on those of us unfortunate commuters who have to use the thoroughfare on a regular basis. Our agonies include, among others, the emotional distress of having to navigate through even more traffic congestion, greater guilt from using fuel more wastefully and emitting more pollution (if one is an environmentalist), longer commuting time, higher gasoline expenses (if using a private vehicle) or higher transport fares (if using a cab), and having to adjust our schedules to avoid or minimize the pain of all of the above.

During those weeks or months when road construction is ongoing, each
time I hit Quirino Avenue and become one of the snarling mass of
slow-moving vehicles on it, the question that inevitably rises out of
my guts in between prayerful ejaculations (not curses, mind you) for
politicians (whose CDFs fund the infrastructure project), DPWH
bureaucrats, and contractors’ is WHY THE ANNUAL RESTORATION OF
VIRTUALLY THE SAME PATCH OF REAL ESTATE?

To be fair, consider first the answers that attach blame on vaguely
defined constituencies: (a) Far too many cars use the Avenue and (b)
Trucks that ply Quirino usually exceed the street’s weight tolerance
limit.

The first reason is an illustration of what economists with their
patently dismal perspective call the “tragedy of the commons.” It is a
parable of how socially adverse individual actions, which may seem not
to matter much as individual actions, can, by the cumulative effect of
sheer numbers, lead to a negative social outcome of no mean proportions.

As applied to the case at hand, the story may go: Consider that Quirino
Avenue is a common resource for Metro Manila car owners and taxicab
passengers. Obviously, the use of the road yields benefits to those who
traverse it. (Otherwise, they would take a different route or not
commute altogether.) But the value of the benefits from taking Quirino
may be cast as a declining function of the number of road users,
because of the misery caused by traffic congestion. In other words, the
more cars there are on Quirino at the time of the commute, the greater
the misery of and the lower the benefits gained by the commuters.

Given these circumstances, how many cars would ply Quirino? Far more
than is socially optimal. The reason for this is that, in choosing to
traverse Quirino, each road user fails to take into account his perhaps
infinitesimal contribution to traffic congestion. But the collective
effect of these inadvertent decisions is exactly what the commuters
failed to consider: far more cars on Quirino than they bargained for.
Which in turn leads to a more rapid deterioration of the road quality
of the Avenue.

The second reason, on the other hand, is a case of a “negative
externality.” An externality, which may be positive or negative, is a
non-market mediated effect that an action of an economic agent has on
others. In other words, other people or firms either gain additional
benefits or incur additional costs as a result of the action of another
person or firm, without a market transaction occurring between the
parties. A classic example of a negative externality is the reduced
catch of fishermen wrought by a polluting firm that is located
upstream. In the case of the excessively heavy trucks on Quirino, the
negative externality they wreak takes the form of a more bumpy, more
accident-prone ride by commuters negotiating Quirino Avenue because of
the greater number of potholes caused by the trucks.

The merits of these two answers notwithstanding, the question remains,
Why cannot the DPWH in its restoration of Quirino Avenue factor in the
(projected) number of private cars that use the highway and the
excessively heavy weights of the trucks so that the quality of the road
would withstand these abuses for, say, at least six years (that is,
over a presidential term)?

Not being an engineer, I do not know if in fact a six-year solution is
technically feasible, or if a technically feasible solution is within
the cost constraints of the DPWH. If it is not, it behooves the
government to endeavor to make it so.

But suppose a feasible solution exists. The question then becomes, is
it in the interest of politicians and DPWH bureaucrats and contractors
to implement the solution? The answer I hazard: Not likely, unless the
correct incentives are in place. Don’t even think graft and corruption.
Just think about the preferences of a politician. Would he prefer to
spend his infrastructure funds on some side road, when less people will
see his name emblazoned on the road work signs? Think about the
preferences of the typical urban-based bureaucrat. Would he prefer
building new roads in far-flung areas of the metropolis to restoring
the same road year in and year out? Imagine what that would mean in
terms of his travel time between the project site and his desk and of
the amenities, or their lack thereof, if the project site is in a
relatively remote place. Think about the preferences of a DPWH
contractor. Would he prefer building new roads in far-flung areas of
the metropolis to restoring the same road year in and year out? Imagine
the difficulty and increased cost of having to move his heavy equipment
to remote places.

And so unless the right incentives and disincentives are set in place,
my dire prediction is the periodic restoration of Quirino Avenue will
continue at the expense of expanding the road networks including those
that would connect urban and rural areas or that would benefit
agriculture and interisland shipping and to the anguish of us regular
road users of the oft-restored thoroughfare.

What can be done to set the incentive right?

My suggestions: Set up a Civil Society group that will play an
oversight function for the DPWH. Let the group formulate and implement
an indicator system that monitors not only the kilometers of roads
built or restored in a given period, but also how many times a
particular road has been repaired in that period. Let the indicator
system be desegregated by contractors, and award positive points to
contractors who deliver good quality projects and charge negative
points on those whose work prove inferior. Advocate that a law be
enacted that gives preferential treatment to those contractors who
deliver quality work and that levies fines on contractors whose
infrastructure projects are revealed over time to be of inferior
quality. In other words, let the contractors live or die by their
reputations. Finally, always be on the lookout to fine-tune the
incentive scheme. Regulation is a dynamic game. The regulated will
always try to find ways to get around the rules. It’s up to the
regulators to devise ways to make the incentives consistent with what’s
good for society.

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