What You Should Know About Megaprojects, and Why: An Overview

TL;DR

This paper provides a comprehensive overview of megaproject management, highlighting their enormous scale, economic impact, recurring issues like overruns, and the need for reform in management practices.

Contribution

It introduces the 'break-fix model' for megaproject management, critiques the Hiding Hand theory, and discusses emerging reforms in the field.

Findings

Global megaproject spending is USD 6-9 trillion annually.

Megaprojects are over budget and over time repeatedly.

A new 'tera era' of trillion-dollar projects is emerging.

Abstract

This paper takes stock of megaproject management, an emerging and hugely costly field of study. First, it answers the question of how large megaprojects are by measuring them in the units mega, giga, and tera, concluding we are presently entering a new "tera era" of trillion-dollar projects. Second, total global megaproject spending is assessed, at USD 6-9 trillion annually, or 8 percent of total global GDP, which denotes the biggest investment boom in human history. Third, four "sublimes" - political, technological, economic, and aesthetic - are identified to explain the increased size and frequency of megaprojects. Fourth, the "iron law of megaprojects" is laid out and documented: Over budget, over time, over and over again. Moreover, the "break-fix model" of megaproject management is introduced as an explanation of the iron law. Fifth, Albert O. Hirschman's theory of the Hiding Hand is revisited and critiqued as unfounded and corrupting for megaproject thinking in both the academy and policy. Sixth, it is shown how megaprojects are systematically subject to "survival of the unfittest," explaining why the worst projects get built instead of the best. Finally, it is argued that the conventional way of managing megaprojects has reached a "tension point," where tradition is challenged and reform is emerging.