Pinheiro Catalão, F; Cruz, C O and Miranda Sarmento, J (2019) Exogenous determinants of cost deviations and overruns in local infrastructure projects. Construction Management and Economics, 37(12), pp. 697-711. ISSN 01446193
Abstract
There is a significant concern about cost deviations and overruns in public projects, particularly by the local governments. The magnitude of expenditure on these infrastructure projects justifies the search for cost deviation reasons, particularly cost overruns. The existing literature also identifies a tendency towards cost overruns in infrastructure projects. However, the analysis of cost overruns determinants has mostly focused on endogenous project characteristics. This research uses a dataset of 4,305 public infrastructure projects, of which 3,338 are local projects, carried out in Portugal between 1980 and 2012. Exogenous determinants (e.g. political, institutional and governance, and economic-related) are also considered in the analysis. An average cost overrun of 19% (9 billion Euros in volume, with a 1 billion Euros overrun) is identified. It is found that central governments incur on an average cost overrun of 23% and local governments on 6%. The analysis confirmed that projects developed by local governments tend to perform better regarding cost deviations and overruns and that exogenous determinants (particularly the political, institutional and governance environment ones) have a strong impact on cost deviations and overruns. These findings on exogenous factors can help local governments to make better management decisions, enhancing governance and institutional frameworks to improve the decision-making process when launching new infrastructure.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cost deviations; cost overruns; endogenous models; exogenous variables; local government; public infrastructure |
| Index terms: | local government, overrun, public project, management decision, dataset, public infrastructure, cost deviation, governance, decision-making process, cost overrun, Portugal, determinant, infrastructure project |
| Subjects: | Geography, infrastructure engineering, decision-making and reasoning, administrative law, infrastructure and transport systems, data management, project controls, decision analysis, risk assessment, business, financial and cost management |
| Topics: | Time Control, Legal Issues, Digital Applications, Governance, Risk Management, Geographical Context, Research Practice, Engineering Principles, Cost Management |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here