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This article summarises key arguments presented by Bent Flyvbjerg** in a 32-page World Bank Policy Research Working Paper available through the World Bank Open Knowledge Repository.

In democratic societies, citizens are often told to trust their leaders and experts when large infrastructure projects are proposed. Yet one of the most important papers ever published by the World Bank suggests that trust, by itself, is not enough.

The paper, authored by Professor Bent Flyvbjerg** and published through the World Bank’s Open Knowledge repository, examines why major infrastructure projects so often disappoint. Its conclusions are both sobering and highly relevant to developing countries such as Jamaica.

Flyvbjerg begins with a simple observation. Across the world, large projects routinely cost far more than originally promised while delivering fewer benefits than forecast. This pattern appears repeatedly in railways, roads, bridges, tunnels, power systems and other major public investments.

The striking aspect of the research is that these failures are not isolated events. They occur so frequently that they cannot reasonably be dismissed as bad luck or rare mistakes.

According to the study, project promoters frequently underestimate costs and overestimate benefits. As a result, decision-makers are presented with a picture that is substantially more attractive than reality eventually proves to be.

The World Bank paper identifies two principal causes.

The first is optimism bias. Human beings naturally tend to believe that their project will succeed where others have struggled. They focus on favourable scenarios while underestimating difficulties, delays and unforeseen complications.

The second is what Flyvbjerg calls strategic misrepresentation. In some instances, project advocates deliberately present overly favourable forecasts because doing so improves the likelihood of obtaining political approval, financing, or public support.

Regardless of which explanation applies, the outcome is the same. Taxpayers inherit risks that were not honestly or accurately presented when the project was approved.

A particularly important contribution of the paper is its distinction between what it calls the “inside view” and the “outside view”.

The inside view examines a proposed project in isolation. Planners ask what they expect to happen and build forecasts around those expectations.

The outside view takes a different approach. It asks what actually happened to similar projects elsewhere.

If dozens of comparable projects experienced significant cost overruns, the prudent assumption is that the new project may encounter similar difficulties. Rather than relying on optimistic projections, decision-makers should begin with historical evidence.

Flyvbjerg refers to this method as Reference Class Forecasting, and the World Bank paper presents it as one of the most effective tools available for improving public investment decisions.

For small developing countries, this lesson is especially important.

A wealthy nation can sometimes absorb the consequences of a multi-billion-dollar mistake. A poorer country may spend decades paying for one.

Every unnecessary dollar committed to an underperforming project is a dollar unavailable for schools, hospitals, roads, water systems, public safety, energy resilience or productive private investment.

This is why transparency is not an obstacle to development. It is a prerequisite for development.

The paper’s implications extend far beyond any single sector. Whether a country is considering highways, ports, airports, energy facilities, industrial parks, logistics centers, or other large-scale investments, the same questions should always be asked.

What happened to comparable projects elsewhere?

Were original cost estimates accurate?

Did promised benefits materialise?

How frequently did delays occur?

Who ultimately absorbed the financial risks?

These questions are not expressions of cynicism. They are expressions of responsible citizenship.

One of the most valuable insights from Flyvbjerg’s research is that citizens do not need to prove corruption before requesting answers. Nor do they need to demonstrate that a project will fail before asking for evidence.

The burden properly rests upon those proposing major expenditures to demonstrate that their assumptions are realistic and that comparable projects have succeeded under similar conditions.

For Jamaica, where public resources are limited and national needs are many, this lesson deserves careful attention.

The World Bank paper ultimately offers a principle that is as simple as it is powerful: before committing taxpayers to enormous financial obligations, governments should rely less on promises and more on evidence.

That is not anti-development.

It is the very foundation of sound development.

**PS: Bent Flyvbjerg is Professor Emeritus at the University of Oxford’s Saïd Business School and holds a Chair in Major Program Management at the IT University of Copenhagen. He is the most-cited scholar in his field. 

• Advisor: He actively serves as a senior advisor to Fortune 500 companies and governments worldwide on how to rescue failing multi-billion-dollar infrastructure portfolios.