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Cost overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness

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  • Chantal C. Cantarelli
  • Bent Flybjerg
  • Eric J. E. Molin
  • Bert van Wee

Abstract

Managing large-scale transportation infrastructure projects is difficult due to frequent misinformation about the costs which results in large cost overruns that often threaten the overall project viability. This paper investigates the explanations for cost overruns that are given in the literature. Overall, four categories of explanations can be distinguished: technical, economic, psychological, and political. Political explanations have been seen to be the most dominant explanations for cost overruns. Agency theory is considered the most interesting for political explanations and an eclectic theory is also considered possible. Nonpolitical explanations are diverse in character, therefore a range of different theories (including rational choice theory and prospect theory), depending on the kind of explanation is considered more appropriate than one all-embracing theory.

Suggested Citation

  • Chantal C. Cantarelli & Bent Flybjerg & Eric J. E. Molin & Bert van Wee, 2013. "Cost overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness," Papers 1307.2176, arXiv.org.
    • Handle: RePEc:arx:papers:1307.2176
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    References listed on IDEAS

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    Cited by:

    1. Francisco Pinheiro Catalão & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2023. "Public Sector Corruption and Accountability in Cost Deviations and Overruns of Public Projects," Public Organization Review, Springer, vol. 23(3), pages 1105-1126, September.
    2. Giuliano Marella & Valentina Antoniucci, 2019. "Time Overrun in Public Works—Evidence from North-East Italy," Sustainability, MDPI, vol. 11(24), pages 1-17, December.
    3. Zhang, Yijia & Cheng, Lu, 2023. "The role of transport infrastructure in economic growth: Empirical evidence in the UK," Transport Policy, Elsevier, vol. 133(C), pages 223-233.
    4. Joseph Sturm & Mashrur Chowdhury & Anne Dunning & Jennifer Ogle, 2011. "Analysis of cost estimation disclosure in environmental impact statements for surface transportation projects," Transportation, Springer, vol. 38(3), pages 525-544, May.
    5. Kirchherr, Julian & Ahrenshop, Mats-Philip & Charles, Katrina, 2019. "Resettlement lies: Suggestive evidence from 29 large dam projects," World Development, Elsevier, vol. 114(C), pages 208-219.

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