The aim is to both develop a new theory-based framework for analysing cost overruns, and to use this for an empirical study of cost overruns in infrastructure projects in Sweden. The conceptual part is based on a literature review and the empirical part is primarily based on a questionnaire to project managers. The framework has a descriptive part comprising two dimensions: when, during the process, the cost overrun arose and what part of the cost function was responsible: change in the product, change in quantities of the inputs and change in price of inputs. The explanatory part is a development of Flyvbjerg's theories and identifies four possible explanations: political/strategic aspects, psychological aspects, competence-related aspects and bad luck. The result from the empirical study is that most cost overruns occur in the initiation and planning stages up to the final design and are related to design changes and increases in the amount of inputs needed because of technical and administrative problems. Of the explanatory factors, there is most support for lack of competence and optimism bias.
A combination of strong urbanization and shortage of land in many European city areas prompts an impetus of infill development, with current residents often raising concerns that infill development leads to lower nearby property prices. The aim of this paper is to analyze how nearby property prices are affected by new construction projects in Stockholm, Sweden. We use a difference-in-difference specification in a hedonic model, and our sample consists of more than 40,000 observations over the period 2005-2013. Our results are robust and indicate that house prices in nearby areas increase following the completion of infill development. Our results also indicate that infill development only has a positive spillover effect on nearby house prices only in areas with lower incomes, more public housing units and more inhabitants born abroad.
Many infrastructure projects have cost overruns and there has been a lot of research both on why these cost overruns occur and what can be done to reduce hem. Bent Flyvbjerg is the leading researcher in the area and in this article his proposals are used as the starting point. Besides a literature review, a questionnaire was sent out to experienced Swedish project managers to find out what they thought could reduce cost overruns. The literature review and the questionnaire were the foundation for the proposals formulated in this article. Proposals concerned three areas: (1). Organisational macro-structure, e.g. using more PPP projects but also decentralisation of budgets where cost overruns in one project in a region lead to less alternative projects in the specific region. (2). Organisational quality: It should be easy to see when and where cost overruns occur and who was responsible. There should be a well-developed knowledge management system in the organisation and an organisation culture of openness with a focus on improvements. (3). Organisational processes, e.g. a systematic use of external reviewers in different stages of a project. Keywords: Cost overruns, Infrastructure projects, Policy measures
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