The Tappan Zee Bridge across the Hudson River is in a weird location that makes it freakishly long. Why’s it there instead of a bit further south? Well, as David Kestenbaum explains were it further south the toll revenue would go to the Port Authority of New York and New Jersey so Governor Thomas Dewey wanted to put it north where the revenue could fund the New York State Thruway.
It’s a great story, though I’m kind of confused to see so many libertarians so excited about it. The basic notion seems to be that if you see “the government” doing “something” and the outcome is perverse, that proves that when “the government” does “things” it gets bad results so the government shouldn’t do anything. But pay attention to the story! This looks to me essentially like a story of the slightly perverse consequences of what amounts to privatization of infrastructure provision. The New York State Thruway Authority dealt with the Hudson River bridge issue in a manner designed to maximize profits rather than a benevolent social planner putting the bridge in the socially optimal more southerly location.
The other way to look at this is to ignore the Port Authority / Thruway Authority competition issue and see it as a federalism story. If the bridge were further south, like around where the Cross County Expressway goes, then the western side of the bridge would be in New Jersey. But the geography of the area is such that the overwhelming preponderance of the social benefit of a river crossing lies in New York State. Consequently, to get the project done New York State would either need to agree to structure it so as to offer cross-subsidy to New Jersey (which is what the Port Authority option would have done) or else needs to do it as an entirely New York project even if that meant a longer bridge further north. The fact that metropolitan areas in the northeastern United States are often divided among more than one state tends to complicate regional planning in an unfortunate way. But what does the Cato Institute propose to do about this? I wish we could go back in time and redraw the lines like this but it’s obviously a non-starter.