Survival of the Unfittest: Why the Worst Infrastructure Gets Built-And What We Can Do About it

By Bent Flyvbjerg. 2009

560 citations recorded by the source corpus.

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.

Subfields: Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f18085814505074a4c2847bd17613f9f555ede46

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In Management Science and Operations Research

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Citations in the corpus

Should We Build More Large Dams? The Actual Costs of Hydropower Megaproject Development (2014, background): “…on decisionmaking under uncertainty that won Princeton psychologist Daniel Kahneman the Nobel Prize in economics in 2002 (Kahneman and Tversky, 1979a, 1979b; Kahneman, 1994) extended and applied by Bent Flyvbjerg and colleagues to infrastructure projects (Flyvbjerg et al., 2003; Flyvbjerg, 2009).”
Top Ten Behavioral Biases in Project Management: An Overview (2021, background): “It results in an inverted Darwinism, “survival of the unfittest” (Flyvbjerg, 2009b).”
What you Should Know about Megaprojects and Why: An Overview (2014, unknown): “The common practice of depending on the Hiding Hand or creative error in estimating costs and benefits, thus “showing the project at its best” as an interviewee put it in a previous study, results in an inverted Darwinism, i.e., the “survival of the unfittest” (Flyvbjerg, 2009).”
Rethinking Construction Cost Overruns: Cognition, Learning and Estimation (2014, background): “In effect, delusion and deception are complementary explanations of the failure of large infrastructure projects, causing works such as diverting existing utilities, environmental impacts and foreseeable risks to be continually underestimated in construction (Flyvbjerg 2009).”
Does Infrastructure Investment Lead to Economic Growth or Economic Fragility? Evidence from China (2016, unknown): “As a low estimate (i.e. 60 per cent) of the US$12.5 trillion of corporate debt estimated by McKinsey (2015, p. 75), 2008; 2009; Lardy, 2014, p. 20; Deng et al. , 2015, Table III, p. 68).”
Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View (2013, unknown): “…namely that ex ante estimates of costs and benefits – used in the business cases, cost–benefit analyses, and social and environmental impact assessments that typically support decisions on projects – are often significantly different from actual ex post costs and benefits (Flyvbjerg, 2009).”