Beyond the Socio-Economic Impact of Transport Megaprojects

Andrius Montrimas, Jurgita Bruneckienė and Vaidas Gaidelys
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Andrius Montrimas: School of Economics and Business, Kaunas University of Technology, LT-44239 Kaunas, Lithuania
Jurgita Bruneckienė: School of Economics and Business, Kaunas University of Technology, LT-44239 Kaunas, Lithuania
Vaidas Gaidelys: School of Economics and Business, Kaunas University of Technology, LT-44239 Kaunas, Lithuania

Sustainability, 2021, vol. 13, issue 15, 1-29

Abstract: For more than two decades, scholars have been escalating asymmetric information issues in megaproject management linking them to enhanced public debt concerns. Most megaprojects turn out to be a burden on economy when constructions are completed. Authorities, meanwhile, continue to promote the advancement of megaprojects with overly optimistic public messages on expected socio-economic benefits. A combination of expertise in the topic, in-depth literature analysis, independent cost-benefit reassessment, and empirical survey of related documentation of three EU transport megaprojects shows political implications to be the essential causes of information asymmetries in megaproject management. Socio-economic over-estimations imply to be useful for obtaining and securing funding commitments at the political level, but then the real project value is often omitted from the assessment. This work takes a wider, strategic approach beyond the usual socio-economic reasoning. The article argues that socio-economic assessment practice is too narrow to grasp the full potential impact of a megaproject. Therefore, a strategic assessment should be performed by public authorities along with an appropriate funding mechanism. This work contributes to science by suggesting a direction to more constructive discussions between scholars and politicians that could lead to more effective future decisions on the overall sustainability of economies.

Keywords: megaprojects; asymmetric information; optimism bias; strategic misrepresentation; escalating commitments; cost overruns; project delays; public debt (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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