Tuesday, November 02, 2004

Mega-Projects Around the World

Bent Flyvbjerg et al. "Megaprojects and Risk: An Anatomy of Ambition" provide international data on these undertakings.

Having read their papers over the years, I had not yet seen the book. The JEL's reviewer, Peter Forsyth, notes that the authors' surveys show that, "Out of 258 projects across the world, 90 percent experienced cost overruns, and the average overrun was 28 percent. In a survey of 210 road and rail projects, actual demand for the projects was 39 percent less than the forecast average, though actual demand for road projects was 9 percent higher than forecast."

Once the boosterism boils, analysis and thought go out the window. The green-based romance re trains lives on. The reality of auto use is resisted. Cost-benefit analysis is abused, misused or not used.

Preparing for a class on the topic, I am told that Edith Stokey and Richard Zeckhauser's "A Primer for Policy Analysis" is the best. Yet, it is practically silent on the real problem.

Truth in advertising would insist that the subject matter is not for the timid. To be effective, CBA cannot be practiced by green-shade backroom types. The opposite is true. A new and adventurous breed that finds ways to work like "Cost-Benefit Practitioners Without Borders" seems to be the only way to rescue the field from irrelevance.