EconPapers    
Economics at your fingertips  
 

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

Bent Flyvbjerg

Oxford Review of Economic Policy, 2009, vol. 25, issue 3, 344-367

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.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (40) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/grp024 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Survival of the Unfittest: Why the Worst Infrastructure Gets Built, And What We Can Do about It (2013) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:25:y:2009:i:3:p:344-367

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by C. Allsopp

More articles in Oxford Review of Economic Policy from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2019-09-13
Handle: RePEc:oup:oxford:v:25:y:2009:i:3:p:344-367