Government project disasters

[José]

L'Institute of Economics Affairs vient de publier They meant well, government project disasters de D. R. Myddelton. Il s'agit d'un livre consacré à l'étude de différents projets gouvernementaux qui terminèrent mal, très mal en termes économiques, comme le Concorde, la Coupole du Millénaire ou le tunnel sous la Manche :

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How is it that so many major, government-sponsored projects can lose so much money? As the title of this book makes clear, the answer to this question does not lie with malign intentions on behalf of their promoters in government. In a highly readable but detailed account of the history of six major government project failures, D. R. Myddelton shows that failure results from mismanagement, lack of clear lines of responsibility and lack of accountability. These problems have their roots in the wider economic problems of undertaking quasi-commercial ventures in the public, rather than in the private, sector. This results in well-meaning politicians and government officials wasting huge sums of taxpayers' money.

The projects examined in this book cover a period of 80 years. Their analysis leads to important lessons for a wider range of economic activity in which governments become involved, including major government IT projects and the hosting of the Olympic Games in 2012. The case study approach ensures that the book is very readable; it also provides an excellent basis for discussion on university courses, including MBAs, that cover public policy and management issues.

L'executive summary :

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Summary

• Government officials and ministers usually mean well when they promote and manage quasi-commercial projects in the public sector, which however often turn out to be financial disasters. Any technological advances come at huge expense.
  
• A recurring rationale for grandiose projects, from the groundnut scheme to the Millennium Dome, has been to boost ‘national prestige’, but this concept has little real value.
  
• The costs of ventures dependent on new, untried technology, such as the R.101 airship or nuclear power, are extremely uncertain, so taxpayers have to underwrite their high risks. Initial financial estimates may often be purposely too low.
  
• Partly due to changes in specifications, many of the projects incurred time and cost overruns of more than 100 per cent. The high speed Channel Tunnel Rail Link is still not ready more than thirteen years after the Tunnel itself opened.
  
• The absence of market pressures in the UK’s civil nuclear power programme meant that nobody knew or cared how much it was costing. The result was total losses far exceeding those of all the other five projects together.
  
• State projects are always liable to short-term political interference, which may increase costs, as for the Millennium Dome, or risks, as for the R.101 airship.
  
• The government’s opaque accounting practices often disguise the true level of state spending on large projects, as with the Channel Tunnel Rail Link.
  
• Governments do not understand markets, and on some projects, such as Concorde, made little effort to research likely customer demand.
  
• In the market system investors bear the costs of ventures that fail, but in the political system taxpayers have to do so. As a result, governments often choose to continue projects such as the groundnut scheme and Concorde, even after it has become clear they are not commercially viable.
  
• None of the six projects was well managed and many of the failures were down to politicians: installing inadequate or over-complex organisations, appointing incompetent managers, or insisting on excessive secrecy.
  

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