The literature on cost overruns for infrastructure projects is rich, much more so than that for absolute costs. The best-known name in this literature is Bent Flyvbjerg, who in the early 2000s collated a number of datasets from the 1980s and 90s to produce a large enough N for analysis, demonstrating consistent, large cost overruns, especially for urban rail. Subsequently, he’s written papers on the topic, focusing on underestimation and on how agencies can prospectively estimate costs better and give accurate numbers to the public for approval. This parallels an internal trend in the US, where Don Pickrell identified cost overruns in 1990 already, using 1980s data; Pickrell’s dataset was among those analyzed by Flyvbjerg, and subsequent to Pickrell’s paper, American cost overruns decreased to an average of zero for light rail lines.
But a fundamental question remains: are cost overruns really a matter of underestimation, or a true…
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