Be careful what you ask for. A very thought-provoking article on Bloomberg.com reports on a study of the cost estimate accuracy of public construction projects. In short, the experts rosy projections for cost and time fall way off the mark, but of course you probably all ready knew that. There are good excuses of course, just like the ones your boss will accept when your project at work takes twice as long and costs 100% more than you projected it would. The real excuse is nobody cares when they are spending tax money. Keep that in mind if you believe the answer to stimulating the economy or balancing the budget is higher taxes.
Here is a small excerpt, but take a look at the full article.
This glamorizing extends not just to imagery but also to forecasts. Project promoters routinely overstate benefits and understate costs — and not just a little bit.
“Cost overruns in the order of 50 percent in real terms are common for major infrastructure, and overruns above 100 percent are not uncommon,” Bent Flyvbjerg, a professor of major program management at the University of Oxford’s Said Business School, writes in the Oxford Review of Economic Policy. “Demand and benefit forecasts that are wrong by 20-70 percent compared with actual development are common.”
To draw these conclusions, Flyvbjerg analyzed results from 258 projects in 20 countries over 70 years, the largest such database ever compiled. Like the “stars without makeup” features in celebrity tabloids, his research provides a disillusioning reality check. “It is not the best projects that get implemented, but the projects that look best on paper,” Flyvbjerg writes. “And the projects that look best on paper are the projects with the largest cost underestimates and benefit overestimates, other things being equal.”