Shaping successful mega-project investments

Abstract Many countries are proposing major public infrastructure investment, addressing the net zero imperative and need to recover from the pandemic. Yet the investments will deliver on these policy goals only if appraisals take account of strategic complementarities in determining the future path of the economy, including technological choices. Cost–benefit analysis as currently applied is unable to do this, even when incorporating wider economic benefits. Furthermore, in purporting to be a technical tool, it fails to acknowledge the inevitable political judgements and distributional consequences involved in selecting projects. There is a need for an approach to appraisal that identifies when major projects have transformational potential, and an approach to policy that ensures complementary investments occur, by tackling coordination failures either among different policy actors or between private- and public-sector activities.