The Economics of Mega-projects

Abstract

Mega-projects play a foremost role not only in developed countries, but mainly in developing countries in several respects: political dynamics, social effects, and economic fallout (see Bovensiepen and Meitzner Yoder in Asia Pac J Anthropol 19(5):381–394, 2018, [4]). As correctly stated by van Wee and Tavasszy in Decision-making on mega-projects—cost-benefit analysis, planning and innovation, pp 40–65, 2008, [31], first, they are heavily under debate at the political level because of their economic impacts and important budget implications; in fact mega-projects are “large-scale, complex ventures that typically cost $1 billion or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people” (see Flyvbjerg in The Oxford handbook of megaproject management. Oxford University Press, Oxford, pp 1–18, 2017, [15]). Second, there is a lively debate also among scholars and practitioners owing to the huge cost escalation and schedule delay of these projects (see Flyvbjerg et al. in Megaprojects and risk: an anatomy of ambition. Cambridge University Press, Cambridge, 2003a, [8], Odeck in Transp Policy 11(1):43–53, 2004, [22]), but also due to the uncertainty of their wider economic effects, which can be interpreted as related externalities.