The performance of infrastructure projects, particularly megaprojects, has long been of concern to the UK government. In this Insights Paper we investigate the high, and growing, costs of UK infrastructure development relative to other economic activities . We first address the question of whether the cost problem in the UK is worse than in comparator countries. Having shown conclusively that it is not, we move on to investigate why infrastructure development costs should be inflating faster than costs in the economy across comparator countries, with particular attention to the UK. We identify four possible explanations for this phenomenon: the Baumol effect; citizen voice; the technological sublime; and the iron law of megaprojects. We argue that the latter two undoubtedly contribute to high infrastructure cost levels, but that they display no discernible trend that might have caused the relative infrastructure cost inflation over the past 50 years which appears to have started around 1970. We review the available evidence for the UK on the Baumol effect and citizen voice, concluding that both are likely at play. We then identify potential areas for further research on high infrastructure relative cost inflation.
Author Graham Winch