No prizes, but guess which country is being talked about in this extract from a recent paper on the robustness of processes for evaluating major infrastructure project (it's not the UK):
‘Infrastructure investment is a cost, not a benefit; a means, not an end. This proposition, which is obvious to economists, is as utterly alien to contemporary Xxxxxxxxxx politicians as the notion of comparative advantage was to their predecessors.
To recognise this, however, is not to imply that no value should be placed on good appraisal; on the contrary, it is one of the protections taxpayers deserve to have. Testimonials of commitment to ‘evidence-based policy’ notwithstanding, shaping an environment in which project appraisal can effectively discharge this task remains as great a challenge as it has ever been.
Overall, our review suggests the following conclusions:
• Insufficient attention is paid in the evaluation process to options that would avoid investment, or, more broadly, that would focus on securing greater efficiency from the existing capital stock. Simply put, infrastructure investment appears to be viewed as a benefit, rather than a cost.
• The distortions arising from this undesirable narrowing of the range of options considered are then compounded by evaluations that are too vulnerable to ‘fudge factors’. In a Gresham’s law of evaluation, bad evaluations (often by consultants) can drive out good, given that they trade at equal values.
In our view, these outcomes are driven by governments that see little real value in major project evaluation. They may see merit in evaluation of essentially routine decisions (such as the decision to place a new roundabout or improve a road surface) or in cost-effectiveness analysis of the options available for meeting predetermined goals (such as improving bus transit in a congested area) but not in the full analysis of objectives and options (including the option of not spending taxpayers’ money). This, we argue, reflects the impact of a perception (initially due to strong economic growth, and then to a belief that the global financial crisis justifies greatly increased outlays) that public funds have a negligible opportunity cost. This perception has been accentuated by the growing blurring of accountability…and the blurring also of responsibility for financing infrastructure as between the public and private sectors (which, whatever its other merits, increases the return to rent-seeking deals between governments and private infrastructure developers). Together, these trends risk making cost–benefit analysis merely a box to be ticked, rather than an exercise that has real value, not least to government itself.’
