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Understanding transport project appraisal in its institutional dimension



Despite extensive convergence on the methodologies for transport project appraisal, the actual performance of transport infrastructures frequently differs from ex-ante forecasts. Among the possible reasons for this discrepancy, there are technical and institutional aspects. Technical reasons point to lacking data, failure to identify effects generated by the project, impossibility to include certain effects in the analysis. Institutional ones include strategic misrepresentations by project promoters, absence of incentives for the private and public sector to avoid optimism bias and reveal true information about the project, path dependency. This paper adopts a conceptual framework for the analysis of transport project appraisal systems, based on relevant literature and illustrated through good practices from different countries and international organisations. The framework’s illustration highlights how an appropriate institutional setting is instrumental for the proper use of transport project appraisal and its performance. The paper argues that embedding transport project appraisal in a formalised institutional setting is important to ensuring more transparency in public investment decision making and reducing uncertainties stemming from arbitrary or biased decision processes. Further, a robust institutional setting can increase the solidity and comparability of appraisal results, as well as ensure that these results feed into the decision-making process.

Suggested Citation

  • Chiara Pancotti & Matteo Pedralli & Geert Smit & Silvia Vignetti, 2020. "Understanding transport project appraisal in its institutional dimension," Working Papers 201902, CSIL Centre for Industrial Studies.
  • Handle: RePEc:mst:wpaper:201902

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    References listed on IDEAS

    1. Paolo Beria & Michele Giove & Maria Francesca Miele, 2012. "A Comparative Analysis Of Assessment Approaches. Six Cases From Europe," Articles, International Journal of Transport Economics, vol. 39(2).
    2. Bent Flyvbjerg, 2007. "Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures," Environment and Planning B, , vol. 34(4), pages 578-597, August.
    3. Bent Flyvbjerg, 2013. "Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View," Papers 1302.2544,
    4. Morten Skou Nicolaisen & Patrick A. Driscoll, 2016. "An International Review of Ex-Post Project Evaluation Schemes in the Transport Sector," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-33, March.
    5. Chantal C Cantarelli & Bent Flyvbjerg & Bert van Wee & Eric J E Molin, 2010. "Lock-in and its Influence on the Project Performance of Large-Scale Transportation Infrastructure Projects: Investigating the Way in Which Lock-in Can Emerge and Affect Cost Overruns," Environment and Planning B, , vol. 37(5), pages 792-807, October.
    6. Dreze, Jean & Stern, Nicholas, 1990. "Policy reform, shadow prices, and market prices," Journal of Public Economics, Elsevier, vol. 42(1), pages 1-45, June.
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    More about this item


    Cost-Benefit analysis; project appraisal; transport project; decision-making process;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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