Why Governments Keep Overpaying for Construction

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Aug 30, 2026 · 8m · transcript

Governments worldwide routinely pay 30 to 50 percent more for major construction projects than private developers would. In this episode, Lucas and Luna dig into the concrete reasons behind the public-private cost gap, from procurement rules that favor the lowest bidder to the hidden costs of environmental reviews and local-content mandates. They take a close look at a proposed high-speed rail project whose budget ballooned from $30 billion to over $100 billion, and compare it with a private hospital built for a fraction of the cost. With insights from academic studies and real-world…