Hard infrastructure

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Highway 401 in Toronto, the busiest highway in North America

Hard infrastructure encompasses networks necessary for the functioning of a modern industrial nation. This article delineates both the fixed assets, and the control systems, software required to operate, manage and monitor the systems, as well as any accessory buildings, plants, or vehicles that are an essential part of the system. Also included are fleets of vehicles operating according to schedules such as public transit buses and garbage collection, as well as basic energy or communications facilities that are not usually part of a physical network, such as oil refineries, radio, and television broadcasting facilities.

Typical attributes

Hard infrastructure in general usually has the following attributes:

Capital assets that provide services

These are physical assets that provide services. The people employed in the hard infrastructure sector generally maintain, monitor, and operate the assets, but do not offer services to the clients or users of the infrastructure. Interactions between workers and clients are generally limited to administrative tasks concerning ordering, scheduling, or billing of services.

Large networks

These are large networks constructed over generations, and are not often replaced as a whole system. The network provides services to a geographically defined area, and has a long life because its service capacity is maintained by continual refurbishment or replacement of components as they wear out.

Historicity and interdependence

The system or network tends to evolve over time as it is continuously modified, improved, enlarged, and as various components are rebuilt, decommissioned or adapted to other uses. The system components are interdependent and not usually capable of subdivision or separate disposal, and consequently are not readily disposable within the commercial marketplace. The system interdependency may limit a component life to a lesser period than the expected life of the component itself.

Natural monopoly

The systems tend to be natural monopolies, insofar that economies of scale means that multiple agencies providing a service are less efficient than would be the case if a single agency provided the service. This is because the assets have a high initial cost and a value that is difficult to determine. Once most of the system is built, the marginal cost of servicing additional clients or users tends to be relatively inexpensive, and may be negligible if there is no need to increase the peak capacity or the geographical extent of the network.

In public economics theory, infrastructure assets such as highways and railways tend to be public goods, in that they carry a high degree of non-excludability, where no household can be excluded from using it, and non-rivalry, where no household can reduce another from enjoying it. These properties lead to externality, free ridership, and spillover effects that distort perfect competition and market efficiency. Hence, government becomes the best actor to supply the public goods.[1]

Transportation infrastructure

For canals, railroads, highways, airways and pipelines see Grübler (1990),[2] which provides a detailed discussion of the history and importance of these major infrastructures.

Energy infrastructure

Coal mines, oil wells and natural gas wells may be classified as being part of the mining and industrial sector of the economy, not part of infrastructure.[3]

Water management infrastructure

Irrigation canal near Channagiri, Davangere District, India

Communications infrastructure

Solid waste management

A waste collection vehicle in Sakon Nakhon, Thailand.

Earth monitoring and measurement networks

A Kinemetrics seismograph, formerly used by the United States Department of the Interior.


References

  1. Myles, G. D. (1995) Public Economics. Cambridge University Press. 263-264 pg.
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  3. Economic Infrastructure CRS Codes, OECD http://www.oecd.org/dataoecd/12/25/43860714.pdf
  4. Fluviometer

Bibliography

  • Larry W. Beeferman, "Pension Fund Investment in Infrastructure: A Resource Paper", Capital Matter (Occasional Paper Series), No.3 December 2008
  • A. Eberhard, "Infrastructure Regulation in Developing Countries", PPIAF Working Paper No. 4 (2007) World Bank
  • M. Nicolas J. Firzli & Vincent Bazi, “Infrastructure Investments in an Age of Austerity : The Pension and Sovereign Funds Perspective”, published jointly in Revue Analyse Financière, Q4 2011 issue, pp. 34– 37 and USAK/JTW July 30, 2011 (online edition)
  • Georg Inderst, "Pension Fund Investment in Infrastructure", OECD Working Papers on Insurance and Private Pensions, No. 32 (2009)
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External links

[Category:Infrastructure]