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die belebende Bedenkung

Hammer and action

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golden-hammer-nailConsideration of the Do-minimum case in transport investment appraisal has tended to get sidelined, wrote David Metz.

[‘Do Minimum’ can be the best policy, David Metz, June 2016]

* There is a ‘bias to action’ that motivates contractors and consultants to favour construction, since that is how they earn revenues. Likewise, many politicians favour investment that gains them credit. The bias to action is compounded by the well-known phenomenon of ‘optimism bias’, which involves underestimating construction costs and overestimating usage.

* Spending other people’s money allows these biases to flourish. Spending your own, or your shareholders’, enforces a more rigorous analysis. A mistaken investment in the private sector can be damaging to the business and to the reputations of those responsible, but in the public sector, the ship of state sails onwards, with blame for disappointing investments being diffuse.

* We neglect the ‘opportunity costs’ of investments: the benefits forgone from better use of the resources.

There are of course uncertainties associated with the Do-minimum case, but these are not different in kind or scale with those associated with the Do-something case. It may take more imagination to consider how users of transport systems – individuals and businesses – respond to capacity constraints.

The National Infrastructure Commission, and HS2, can be seen as instances of the bias-to-action and golden hammer phenomena.

[Adage from Wikipedia]

‘If you take your poorly running car to the mechanic who specializes in transmissions, you are more likely to have a new transmission put in than to have the actual problem fixed.’

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Written by beleben

September 28, 2016 at 9:57 am

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