Cost Deviations in MDB Funded Transport Infrastructure Projects
Author
Hougaard, Tobias Lilleøre
Term
4. term
Publication year
2020
Submitted on
2020-05-29
Pages
58
Abstract
Mange udviklingslande har svag transportinfrastruktur og få midler til at forbedre den. Derfor søger de ofte finansiering hos multinationale udviklingsbanker (MDB’er) som Den Asiatiske Udviklingsbank (ADB), der bruger næsten en tredjedel af sit budget på transportinfrastrukturprojekter (TIP’er). Alligevel ved vi relativt lidt om, hvor præcise MDB’er er til at budgettere sådanne projekter, selv om forskning i nationalt finansierede projekter viser, at store afvigelser mellem budget og faktiske omkostninger er et udbredt problem. Denne afhandling undersøger, hvorfor ADB-finansierede TIP’er har forskellige omkostningsafvigelser (forskellen mellem planlagt budget og endelige omkostninger). To forklaringer testes: (1) at afvigelserne skyldes forskelle i landenes politikker og institutioner, og (2) at afvigelserne opstår, fordi låntagere strategisk misrepræsenterer omkostninger for at få finansiering. Analysen bygger på data fra 179 ADB-støttede TIP’er og anvender kvantitative metoder til at teste sammenhænge mellem indikatorer for disse teorier og projekternes omkostningsafvigelser. Resultaterne viser ingen sammenhæng mellem omkostningsafvigelser og vurderinger af landes politikker og institutioner. Det tyder på, at sådanne forskelle i sig selv ikke forklarer variationen – medmindre projektbudgetter allerede er justeret efter dem. Derimod er der en vis sammenhæng mellem, hvor stor en andel af projektet låntageren selv finansierer, og størrelsen af omkostningsafvigelser, hvilket giver delvis støtte til hypotesen om strategisk misrepræsentation. Samtidig findes der store forskelle mellem landes afvigelser, som ingen af teorierne forklarer. Afhandlingen peger derfor især på behovet for mere forskning i årsagerne til omkostningsafvigelser frem for at give direkte praktiske anbefalinger.
Many developing countries have weak transport infrastructure and limited funds to improve it. They often seek financing from multinational development banks (MDBs) such as the Asian Development Bank (ADB), which spends nearly one third of its budget on transport infrastructure projects (TIPs). Yet we know relatively little about how accurately MDBs budget these projects, even though research on nationally funded projects shows that large gaps between planned and actual costs are common. This thesis asks why ADB-funded TIPs show different cost deviations (the difference between the planned budget and the final costs). It tests two explanations: (1) deviations reflect differences in countries’ policies and institutions, and (2) deviations occur because borrowers strategically misrepresent costs to obtain funding. Using data from 179 ADB-supported TIPs, the study applies quantitative methods to test correlations between indicators for these theories and project cost deviations. The results show no correlation between cost deviations and ratings of countries’ policies and institutions. This suggests that such differences do not, by themselves, explain variation—unless project budgets are already adjusted to account for them. By contrast, there is some correlation between the share of a project financed by the borrower and the size of cost deviations, offering partial support for the strategic misrepresentation explanation. At the same time, there are large cross-country differences in cost deviations that neither theory explains. The thesis therefore primarily calls for further research into the causes of cost deviations rather than offering direct practical recommendations.
[This abstract was generated with the help of AI]
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