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Considerations and Criteria for Pricing Social and Physical Infrastructures - Essay Example

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619844 Considerations and Criteria for Pricing Social and Physical Infrastructures Introduction With the exception of certain countries such as Saudi Arabia, blessed with natural resources such as oil demanded by the world, most governments at all levels are facing serious financial pressures causing them difficulties in just maintaining state provided current levels of social and physical infrastructure…
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Considerations and Criteria for Pricing Social and Physical Infrastructures
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Considerations and Criteria for Pricing Social and Physical Infrastructures

Download file to see previous pages... The same pattern is true throughout most of the world although exact timelines and extent of public financing of infrastructure differ from country to country. For example, the US has no single payer public health scheme yet its’ health costs are higher Conflicting Theories Regarding State Responsibility Given current budgetary restraints the issue of state responsibility for infrastructure financing is brought into sharp focus. On the one hand, political parties, such as the Conservatives in the UK and the Republicans in the US, argue that public expenditure on infrastructure should be at least frozen if not reduced in order to reduce mounting debt levels. They are vehemently against any taxation increase, especially if it is imposed on business and higher income levels, claiming that it would curb economic growth. The problem with this theory is that as the Bush tax cuts have shown, this did not result in increased investment and job creation to the extent theorists predicted and bolster the US economy as expected. The argument that there would be less need for government financed infrastructure, especially social, was not proven. ...
on both sides of different pricing models, I would suggest that governments, especially those facing financial constraints, should make decisions based on the following considerations. First of all, I believe they should decide based on their vision of social and physical goals, what infrastructures are most required. Then they should consider the pros and cons of different ways of developing the infrastructures, whether by direct government action, by public-private partnerships or whether they are best left to the private sector with varying degrees of regulation and/or public subsidies. If public participation and financing is considered necessary but not affordable on a public free access basis, consideration should be given to the use of deductibles, co-payments, access and service restrictions, user fees, increased taxation and other mechanisms to reduce the cost to the public purse. I will now consider what infrastructures I believe are required for optimal societal functioning and suggest how they could be financed. Social Infrastructure Pricing While I would agree with the notion of the social safety net, I feel we can no longer afford universal free access. For example, while I argue that UK’s publicly funded National Health Service should be maintained because significant medical expenses are beyond the reach of most of its’ people and therefore a moral argument can be made for its’ maintenance. .Canada, Australia and several European countries also have public health systems. A few years ago the province of Ontario, Canada had to increase a specific tax to help fund its’ system. While costly, a healthy population undoubtedly provides return economic benefit to the government in the form of reduced job absenteeism, greater productivity and taxation ...Download file to see next pagesRead More
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