IDEAS home Printed from https://ideas.repec.org/p/mst/wpaper/201902.html
   My bibliography  Save this paper

Understanding transport project appraisal in its institutional dimension

Author

Abstract

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
    as

    Download full text from publisher

    File URL: https://www.csilmilano.com/docs/WP2019_02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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, arXiv.org.
    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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dotti, Nicola Francesco, 2018. "Knowledge that matters for the ‘survival of unfittest’: The case of the new Brussels' rail junction," Transport Policy, Elsevier, vol. 63(C), pages 131-140.
    2. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D., 2018. "Debunking fake news in a post-truth era: The plausible untruths of cost underestimation in transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 357-368.
    3. Kim, Kangsoo & Baek, Seunghan & Cho, Hyejin, 2021. "Impact of a Preliminary Feasibility Study on the accuracy of traffic forecasts in the case of Korea," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 197-211.
    4. Flyvbjerg, Bent & Ansar, Atif & Budzier, Alexander & Buhl, Søren & Cantarelli, Chantal & Garbuio, Massimo & Glenting, Carsten & Holm, Mette Skamris & Lovallo, Dan & Lunn, Daniel & Molin, Eric & Rønnes, 2018. "Five things you should know about cost overrun," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 174-190.
    5. Stern, Nicholas, 2018. "Public economics as if time matters: Climate change and the dynamics of policy," Journal of Public Economics, Elsevier, vol. 162(C), pages 4-17.
    6. Mackinnon, John & Reinikka, Ritva, 2000. "Lessons from Uganda on strategies to fight poverty," Policy Research Working Paper Series 2440, The World Bank.
    7. Cantarelli, C.C. & Flyvbjerg, B. & Buhl, S.L., 2012. "Geographical variation in project cost performance: the Netherlands versus worldwide," Journal of Transport Geography, Elsevier, vol. 24(C), pages 324-331.
    8. Ihsan Issa Ahmad Hosani & Fikri T. Dweiri & Udechukwu Ojiako, 2020. "A study of cost overruns in complex multi-stakeholder road projects in the United Arab Emirates," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 11(6), pages 1250-1259, December.
    9. Rintaro Yamaguchi, 2019. "Intergenerational Discounting with Intragenerational Inequality in Consumption and the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 957-972, August.
    10. Tianxiao Zhou & Rong Tan & Thomas Sedlin, 2018. "Planning Modes for Major Transportation Infrastructure Projects (MTIPs): Comparing China and Germany," Sustainability, MDPI, Open Access Journal, vol. 10(10), pages 1-23, September.
    11. Armstrong, J. Scott & Green, Kesten C. & Graefe, Andreas, 2015. "Golden rule of forecasting: Be conservative," Journal of Business Research, Elsevier, vol. 68(8), pages 1717-1731.
    12. Nicholas Stern, 2010. "Presidential Address Imperfections in the Economics of Public Policy, Imperfections in Markets, and Climate Change," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 253-288, 04-05.
    13. Daniel Albalate & Germá Bel, 2015. "La experiencia internacional en alta velocidad ferroviaria," Working Papers 2015-02, FEDEA.
    14. Beria, Paolo & Debernardi, Andrea & Ferrara, Emanuele, 2017. "Measuring the long-distance accessibility of Italian cities," Journal of Transport Geography, Elsevier, vol. 62(C), pages 66-79.
    15. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Public Policy," Discussion Papers dp-00-24, Resources For the Future.
    16. Jing He & Xikang Chen & Yong Shi & Aihua Li, 2007. "Dynamic Computable General Equilibrium Model and Sensitivity Analysis for Shadow Price of Water Resource in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(9), pages 1517-1533, September.
    17. Love, Peter E.D. & Ika, Lavagnon A. & Ahiaga-Dagbui, Dominic D., 2019. "On de-bunking ‘fake news’ in a post truth era: Why does the Planning Fallacy explanation for cost overruns fall short?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 397-408.
    18. Andrea Bastianin & Paolo Castelnovo & Massimo Florio, 2017. "The Empirics of Regulatory Reforms Proxied by Categorical Variables: Recent Findings and Methodological Issues," Working Papers 2017.22, Fondazione Eni Enrico Mattei.
    19. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Policy," Discussion Papers 10560, Resources for the Future.
    20. Anatoliy Kovalyov & Olha Vynokurova, 2017. "Practical Guideline for the Restructuring of Enterprises Involving Consulting Services (on the Example of Ukrainian Industrial Enterprises)," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(3), pages 171-189.

    More about this item

    Keywords

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mst:wpaper:201902. 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: . General contact details of provider: https://edirc.repec.org/data/csilmit.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marinella Manghina (email available below). General contact details of provider: https://edirc.repec.org/data/csilmit.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.