I wonder about the suitability of this field as a target for EA careers. An unacceptably high percentage of that ~8% of GDP is wasted, and the picture gets worse when we entertain opportunity costs. Insofar as economic growth in general is good for alleviating suffering, the ability to prevent hundreds of millions of dollars in waste per project seems like a good deal.
I suspect there would be a high replacement effect, i.e. if we managed to spend less on these big projects, we’d probably just spend the excess on more big projects or be more ambitious on these projects. Many megaprojects are not obviously contributing to increasing welfare on the margin, although perhaps if megaprojects were cheaper we’d be more willing to invest ones that are more about increasing welfare than status (I suspect status is a major player in megaprojects since many of the examples that come to mind are unnecessarily ambitious when simpler, cheaper solutions would have worked but would have been less prestigious).
My intuition is that there wouldn’t be much of a replacement effect, unless you consider different groups being more likely to do megaprojects because they are more successful a replacement effect.
I expect this for a few reasons. First, megaprojects are usually organized according to a specific need, and I would be surprised if a given stakeholder (like a city or a corporation) had a meaningful backlog. Second, the current amount of spending is an accident; I think this a different case to one where they spent much less than they originally planned. Lastly most of this is debt spending, and I feel like organizations don’t go looking for ways to absorb all of their available credit.
It does occur to me that the debt point probably weighs against EA value, because that effectively means the savings are amortized over the length of the financing, and because the same amount won’t necessarily be spent elsewhere it isn’t a direct benefit to anyone.
I suspect there would be a high replacement effect, i.e. if we managed to spend less on these big projects, we’d probably just spend the excess on more big projects or be more ambitious on these projects. Many megaprojects are not obviously contributing to increasing welfare on the margin, although perhaps if megaprojects were cheaper we’d be more willing to invest ones that are more about increasing welfare than status (I suspect status is a major player in megaprojects since many of the examples that come to mind are unnecessarily ambitious when simpler, cheaper solutions would have worked but would have been less prestigious).
My intuition is that there wouldn’t be much of a replacement effect, unless you consider different groups being more likely to do megaprojects because they are more successful a replacement effect.
I expect this for a few reasons. First, megaprojects are usually organized according to a specific need, and I would be surprised if a given stakeholder (like a city or a corporation) had a meaningful backlog. Second, the current amount of spending is an accident; I think this a different case to one where they spent much less than they originally planned. Lastly most of this is debt spending, and I feel like organizations don’t go looking for ways to absorb all of their available credit.
It does occur to me that the debt point probably weighs against EA value, because that effectively means the savings are amortized over the length of the financing, and because the same amount won’t necessarily be spent elsewhere it isn’t a direct benefit to anyone.