Mega-Project History and Decision-Making

  • Joseph Berechman
Chapter

Abstract

Economic historians have long surmised that history plays a consequential role in the determination of economic growth patterns and levels of development. While this argument has been shown to be valid for entire national economies, can the same be said for projects, especially regarding the probabilities and trials attached to their implementation? A review of mega-projects worldwide reveals that in many cases significant amounts of time elapsed between the moment when the idea of a project first emerged and its initiation. A case in point is the Eurotunnel. The original idea of a cross-channel fixed link, which in modern times culminated in the Channel Tunnel rail project, was first conceived over two centuries ago, in 1802. Diverse geopolitical factors (e.g., British-French relations) and evolving economic realities hindered its construction until 1988. Especially relevant to this observation is the fact that an idea’s origination was often rooted in a single or a series of historical events. Consider the development of the plans for the airport hub constructed in Frankfurt, Germany, in the early 1950s; these plans can be traced to the need to relocate the hub from its original site in Berlin, which stemmed in turn from Germany’s division after World War II. Germany’s unification in 1990 did not, however, serve as a sufficient reason to return the hub to Berlin; the crucial decision factor at this point in time was Germany’s irreversible trends in industrial development (Redding et al. 2010). Another example would be the decision leading to the construction of New York’s Second Avenue Subway (SAS), which was firmly planted in 1942 after the elevated rail line operating above Second Avenue, on Manhattan’s East Side, was demolished. Save for a failed attempt in the 1970s, it took over 70 years before construction actually began. We can therefore conclude that in general, a well-founded idea regarding a project’s need, even if raised many years back, can be quite influential many years later, when making the decisions that may lead to its implementation (Rodrik 2014).

References

  1. Acemoglu, D., and S. Johnson. 2005. Unbundling Institutions. Journal of Political Economy 113 (5): 950–995.CrossRefGoogle Scholar
  2. Acemoglu, D., and A. Robinson. 2000. Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective. The Quarterly Journal of Economics 115 (4): 1167–1199.CrossRefGoogle Scholar
  3. Acemoglu, D., S. Johnson, and A. Robinson. 2005. The Rise of Europe: Atlantic Trade, Institutional Changes and Economic Growth. American Economic Review 95: 546–579.CrossRefGoogle Scholar
  4. Acemoglu, D., A. Ozdaglar, and A. Parandeh Gheibib. 2010. Spread of (Mis)information in Social Networks. Games and Economic Behavior 70: 194–227.CrossRefGoogle Scholar
  5. Bogart, D., and L. Chaudhary. 2012. Regulation, Ownership, and Costs: A Historical Perspective from Indian railways. American Economic Journal: Economic Policy 4 (1): 28–57.Google Scholar
  6. Buzbee, W. 2014. Fighting Westway. New York: Cornell University Press.CrossRefGoogle Scholar
  7. Davis, D., and D. Weinstein. 2002. Bones, Bombs, and Break Points: The Geography of Economic Activity. American Economic Review 92: 1269–1289.CrossRefGoogle Scholar
  8. ———. 2008. A Search for Multiple Equilibria in Urban Industrial Structure. Journal of Regional Science 48: 29–65.CrossRefGoogle Scholar
  9. Nobbe, P., and J. Berechman. 2014. A Technical Report. New York: University Transportation Research Center Region 2, The City College of New York.Google Scholar
  10. Nunn, N. 2007. Historical Legacies: A Model Linking Africa’s Past to Its Current Underdevelopment. Journal of Development Economics 83 (1): 157–175.CrossRefGoogle Scholar
  11. ———. 2009. The Importance of History for Economic Development. NBER Working Papers, 14899.Google Scholar
  12. Plotch, P. 2015. Politics Across the Hudson. New Brunswick, NJ: Rutgers University Press.Google Scholar
  13. Redding S., D. Sturm, and N. Wolf. 2010. History and Industry Location: Evidence from German Airports. http://www.princeton.edu/~reddings/papers/Airports_final_all.pdf.
  14. Rodrik, D. 2014. When Ideas Trump Interests: Preferences, World Views, and Policy Innovations. Journal of Economic Perspectives 28 (1): 189–208.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Joseph Berechman
    • 1
  1. 1.City College of New YorkUniversity of New YorkNew YorkUSA

Personalised recommendations