Cost Overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness
European Journal of Transport Infrastructure Research, vol. 10, no. 1, pp. 5-18
21 Pages Posted: 24 Mar 2013 Last revised: 29 Jul 2013
See all articles by Chantal Cantarelli
Chantal Cantarelli
University of Oxford - Said Business School
Bent Flyvbjerg
E.J.E. Molin
Delft University of Technology - Department of Transport and Logistics
B. van Wee
Date Written: March 1, 2010
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. Non-political 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.
Keywords: cost overruns, explanations, large-scale projects, theoretical embeddedness, transportation infrastructure
Cantarelli, Chantal and Flyvbjerg, Bent and Molin, E.J.E. and van Wee, B., Cost Overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness (March 1, 2010). European Journal of Transport Infrastructure Research, vol. 10, no. 1, pp. 5-18. Available at SSRN: https://ssrn.com/abstract=2237990
University of Oxford - Said Business School ( email )
Park End Street
Oxford, OX1 1HP
Bent Flyvbjerg (Contact Author)
Jaffalaan 5
NL-2628BX