Why should governments build roads (only)?

The involvement of government may be necessary in provision of goods and service that private sector is not interested in, e.g. universal and free education. When competing for profits with private sector, however, governments universally make things worse.

Nevertheless, I argue that you should let government build roads, a lot of roads. The point is that, you need to keep government very busy doing something less disastrous (e.g. building roads), to prevent it from intervening in areas where history has proven that government is very capable of messing thing up, e.g. producing cars.

Building roads are one of such tasks. Building a road from point A to point B, there is not much discretion left to the government to create disasters. Even if officials embezzle half of the funds, the costs of the roads is only twice of the market price. It is already a bless because the government may waste all of the money if you ask it to build a car factory instead.

As roads are such homogenous products, it is actually quite difficult for officials to overprice the costs too much (certainly, they are always overpriced). And as roads are there to stay for decades, you will get caught at some point if you substitute too much sand for concretes to enrich yourself. If you are manager of a state-owned manufacturing company however, by the time you leave the position you can already clean up all the traces of your crime and you can always blame poor decisions for the investment losses. It is much difficult to prove your corruption than when you build roads.

Regarding whether China is building roads that are wasteful and lead to nowhere, I doubt it. Typically newly-built roads are flooded with traffic within 1-2 years. In a densely populated country such as China, it is too difficult to build a road that can lead to nowhere. It is much better than to build monuments, which is completely waste of money.

Xaiver Sala-I-Martin has an interesting collection of photos on how inefficient governments are in constructions.

Governments are stupid, but they are entrenched, and it is unrealistic to get them downsized. They always want to prove the value of their existence.  A compromise solution  believe to be wise is to get governments to build roads, a task that they are “less bad in”. When building roads, they may make some funny mistake as Sala-I-Martin shows to us, but let’s just take them as daily laughter. Life is not perfect, you cannot always get the first best solution.