Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
Why Government Projects Always Cost More Than Estimated
In this episode of The Fiscal Policy Podcast, Lucas and Luna explore the enduring mystery of cost overruns in government projects. From the Sydney Opera House to Boston's Big Dig, they uncover why public megaprojects routinely exceed budgets by 50 to 100 percent or more. The hosts break down the 'optimism bias' that skews initial estimates, the strategic incentives for underestimating costs to win approval, and the 'Hiding Hand' principle that sometimes makes overruns the price of progress. They also examine how the private sector handles risk differently and what…
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