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Policy and Planning for Large Infrastructure Projects: Problems, Causes, Cures


  • Bent Flyvbjerg


This paper argues, first, that a major problem in the planning of large infrastructure projects is the high level of misinformation about costs and benefits that decision makers face in deciding whether to build, and the high risks such misinformation generates. Second, it explores the causes of misinformation and risk, mainly in the guise of optimism bias and strategic misrepresentation. Finally, the paper presents a number of measures aimed at improving planning and decision making for large infrastructure projects, including changed incentive structures and better planning methods. Thus the paper is organized as a simple triptych consisting in problems, causes, and cures.

Suggested Citation

  • Bent Flyvbjerg, 2013. "Policy and Planning for Large Infrastructure Projects: Problems, Causes, Cures," Papers 1303.7400,
  • Handle: RePEc:arx:papers:1303.7400

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    Cited by:

    1. James Leigland & Andrew Roberts, 2007. "The African Project Preparation Gap : Africans Address a Critical Limiting Factor in Infrastructure Investment," World Bank Other Operational Studies 10716, The World Bank.
    2. James Leigland, 2008. "Are Brownfield Concessions Poised for a Comeback? New Signs of Life After a Decade in Decline," World Bank Other Operational Studies 10608, The World Bank.
    3. Antonio Estache & Jose-Luis Guasch & Atsushi Iimi & Lourdes Trujillo, 2009. "Multidimensionality and Renegotiation: Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 41-71, September.
    4. Martijn Leijten, 2013. "Real-world decision-making on mega-projects: politics, bias and strategic behaviour," Chapters,in: International Handbook on Mega-Projects, chapter 4, pages 57-82 Edward Elgar Publishing.
    5. Miranda Sarmento, J.J., 2014. "Public private partnerships," Other publications TiSEM c7d4c978-234c-4f88-83ed-1, Tilburg University, School of Economics and Management.
    6. Thomopoulos, N. & Grant-Muller, S. & Tight, M.R., 2009. "Incorporating equity considerations in transport infrastructure evaluation: Current practice and a proposed methodology," Evaluation and Program Planning, Elsevier, vol. 32(4), pages 351-359, November.
    7. Kelly, Charlotte & Laird, James & Costantini, Stefano & Richards, Phil & Carbajo, José & Nellthorp, John, 2015. "Ex post appraisal: What lessons can be learnt from EU cohesion funded transport projects?," Transport Policy, Elsevier, vol. 37(C), pages 83-91.
    8. Awojobi, Omotola & Jenkins, Glenn P., 2016. "Managing the cost overrun risks of hydroelectric dams: An application of reference class forecasting techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 19-32.
    9. Odeck, James, 2014. "Do reforms reduce the magnitudes of cost overruns in road projects? Statistical evidence from Norway," Transportation Research Part A: Policy and Practice, Elsevier, vol. 65(C), pages 68-79.
    10. Oliveira, Matheus & Ribeiro, Joana & Macário, Rosário, 2016. "Are we planning investments to fail? Consequences of traffic forecast effects on PPP contracts: Portuguese and Brazilian cases," Research in Transportation Economics, Elsevier, vol. 59(C), pages 167-174.
    11. Chung, Demi & Hensher, David A. & Rose, John M., 2010. "Toward the betterment of risk allocation: Investigating risk perceptions of Australian stakeholder groups to public-private-partnership tollroad projects," Research in Transportation Economics, Elsevier, vol. 30(1), pages 43-58.
    12. Engelen, Peter-Jan & Kool, Clemens & Li, Ye, 2016. "A barrier options approach to modeling project failure: The case of hydrogen fuel infrastructure," Resource and Energy Economics, Elsevier, vol. 43(C), pages 33-56.
    13. Verweij, Stefan & van Meerkerk, Ingmar & Korthagen, Iris A., 2015. "Reasons for contract changes in implementing Dutch transportation infrastructure projects: An empirical exploration," Transport Policy, Elsevier, vol. 37(C), pages 195-202.
    14. Tom Ferris & Theo Thomas, 2009. "Review of Public Investment Management Performance (PIMP) in an Economic Crisis," World Bank Other Operational Studies 10532, The World Bank.
    15. Matti Siemiatycki, 2013. "Public–private partnerships in mega-projects: successes and tensions," Chapters,in: International Handbook on Mega-Projects, chapter 7, pages 133-157 Edward Elgar Publishing.
    16. Joseph Sturm & Mashrur Chowdhury & Anne Dunning & Jennifer Ogle, 2011. "Analysis of cost estimation disclosure in environmental impact statements for surface transportation projects," Transportation, Springer, vol. 38(3), pages 525-544, May.
    17. Locatelli, Giorgio & Mancini, Mauro, 2010. "Small-medium sized nuclear coal and gas power plant: A probabilistic analysis of their financial performances and influence of CO2 cost," Energy Policy, Elsevier, vol. 38(10), pages 6360-6374, October.
    18. Cantarelli, C.C. & van Wee, B. & Molin, E.J.E. & Flyvbjerg, B., 2012. "Different cost performance: different determinants?," Transport Policy, Elsevier, vol. 22(C), pages 88-95.
    19. repec:eee:trapol:v:63:y:2018:i:c:p:131-140 is not listed on IDEAS
    20. Rodolfo Garcia Sierra & Alvaro Zerda Sarmiento, 2016. "Hydropower Megaprojects in Colombia and the Influence of Local Communities: A View from Prospect Theory to Decision Making Process based on Expert Judgment used in Large Organizations," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 408-420.
    21. Chantal C. Cantarelli & Bent Flyvbjerg & S{o}ren L. Buhl, 2013. "Geographical Variation in Project Cost Performance: The Netherlands versus Worldwide," Papers 1307.2181,
    22. Stefano Moroni, 2014. "Grandi e piccole opere Per un’azione pubblica responsabile," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2014(3), pages 103-112.
    23. repec:eur:ejisjr:174 is not listed on IDEAS

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