Financing Public Infrastructure

Abstract

Public infrastructural facilities such as dikes, highways, bridges, and seawalls were vital to domestic welfare. Financing their building and maintenance required extensive and sustained state–society collaboration, which was grounded in the shared public interest-based discourse of state legitimation. In fiscally decentralized Tudor and early Stuart England and Tokugawa Japan to 1853, self-governed communities were active in building and managing small- and medium-scale public works. But for large-scale infrastructural facilities, the royal government and shogunate had to become involved through ad hoc financing measures to cover the otherwise insupportable costs. The reverse was true in Qing China prior to 1840. The Qing state could reply upon a centrally managed fiscal system to directly fund the building and maintenance of major public works. For small-scale public works that mainly benefited local residents, it encouraged investment and involvement by local communities and gentry. It also advanced official funds to repair important local water control projects and let the benefited communities return the funds to the state over time without interest.