Big Decisions, Big Risks: Improving Accountability in Mega Projects

Nils Bruzelius, Bent Flyvbjerg, and Werner Rothengatter, "Big Decisions, Big Risks: Improving Accountability in Mega Projects," International Review of Administrative Sciences, vol. 64, no. 3, September 1998, pp. 423-440

17 Pages Posted: 22 Jan 2016 Last revised: 25 Jan 2016

See all articles by Nils Bruzelius

Nils Bruzelius

Independent

Bent Flyvbjerg

University of Oxford - Said Business School

Werner Rothengatter

University of Karlsruhe

Date Written: 1998

Abstract

In terms of risk, many appraisals of very large infrastructure investments assume, or pretend to assume, that infrastructure policies and projects exist in a predictable Newtonian world of cause and effect where things go according to plan. In reality, the world of policy and project preparation and implementation is a highly stochastic one where things happen only with a certain probability and rarely turn out as originally intended. The failure to reflect the probabilistic reality of investment preparation and implementation is a central reason for the poor track record that can be documented for many major projects. The article describes lessons and recommendations on how to improve accountability in decision making on very large infrastructure investments in Denmark. The conventional approach to infrastructure investments is replaced by an alternative focusing on accountability. Redrawing the borderlines of private and public involvement, four specific measures to increase accountability are suggested and detailed:

(1) Transparency,

(2) Performance specifications,

(3) Explication of regulatory regimes, and

(4) Involvement of risk capital.

The decision on whether or not to build a multi-billion-dollar fixed link across the Baltic Sea connecting Scandinavia and Germany is used as an illustrative case. However, the approach developed is likely to be relevant for other major projects in other countries as well. The proposed approach was adopted by the Danish Transport Council and the Council has recommended the approach to the Danish government and parliament for application to major transportation infrastructure projects in Denmark.

Keywords: risk, accountability, megaprojects, transportation, infrastructure investments, decision making, transparency, performance specifications, regulatory regimes, risk capital

Suggested Citation

Bruzelius, Nils and Flyvbjerg, Bent and Rothengatter, Werner, Big Decisions, Big Risks: Improving Accountability in Mega Projects (1998). Nils Bruzelius, Bent Flyvbjerg, and Werner Rothengatter, "Big Decisions, Big Risks: Improving Accountability in Mega Projects," International Review of Administrative Sciences, vol. 64, no. 3, September 1998, pp. 423-440 . Available at SSRN: https://ssrn.com/abstract=2719896 or http://dx.doi.org/10.2139/ssrn.2719896

Nils Bruzelius

Independent ( email )

No Address Available

Bent Flyvbjerg (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Werner Rothengatter

University of Karlsruhe ( email )

Postbox
76128 Karlsruhe, DE 76128
Germany

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