Advanced Search
MyIDEAS: Login to save this article or follow this journal

Survival of the unfittest: why the worst infrastructure gets built--and what we can do about it

Contents:

Author Info

  • Bent Flyvbjerg
Registered author(s):

    Abstract

    The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequences are cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost--benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as 'survival of the unfittest'. Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending, combined with more investments in emerging economies, combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire. Copyright 2009, Oxford University Press.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://hdl.handle.net/10.1093/oxrep/grp024
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

    Volume (Year): 25 (2009)
    Issue (Month): 3 (Autumn)
    Pages: 344-367

    as in new window
    Handle: RePEc:oup:oxford:v:25:y:2009:i:3:p:344-367

    Contact details of provider:
    Web page: http://oxrep.oupjournals.org/

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Bent Flyvbjerg, 2013. "Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View," Papers 1302.2544, arXiv.org.
    2. David Hartgen, 2013. "Hubris or humility? Accuracy issues for the next 50 years of travel demand modeling," Transportation, Springer, Springer, vol. 40(6), pages 1133-1157, November.
    3. Tan, Jeff, 2012. "The Pitfalls of Water Privatization: Failure and Reform in Malaysia," World Development, Elsevier, vol. 40(12), pages 2552-2563.
    4. Raballand, Gael & Bridges, Kate & Beuran, Monica & Sacks, Audrey, 2013. "Does the semi-autonomous agency model function in a low-governance environment ? the case of the road development agency in Zambia," Policy Research Working Paper Series 6585, The World Bank.
    5. Eliasson, Jonas & Fosgerau, Mogens, 2013. "Optimism bias in project appraisal: deception or selection?," Working papers in Transport Economics, CTS - Centre for Transport Studies Stockholm (KTH and VTI) 2013:6, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    6. Ramjerdi, Farideh & Fearnley, Nils, 2014. "Risk and irreversibility of transport interventions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 60(C), pages 31-39.
    7. Eliasson, Jonas & Fosgerau, Mogens, 2013. "Cost overruns and demand shortfalls – deception or selection?," MPRA Paper 49744, University Library of Munich, Germany.
    8. Bent Flyvbjerg, 2014. "What You Should Know About Megaprojects, and Why: An Overview," Papers 1409.0003, arXiv.org.
    9. Emily Poole & Carl Toohey & Peter Harris, 2014. "Public Infrastructure: A Framework for Decision-making," RBA Annual Conference Volume, in: Alexandra Heath & Matthew Read (ed.), Financial Flows and Infrastructure Financing Reserve Bank of Australia.
    10. Giuseppe Bellantuono, 2014. "The regulatory anticommons of green infrastructures," European Journal of Law and Economics, Springer, Springer, vol. 37(2), pages 325-354, April.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:oup:oxford:v:25:y:2009:i:3:p:344-367. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.