Evaluating Cost Estimation and Budgeting Challenges in Public Health and Education Infrastructure Projects

Abstract

Persistent cost overruns and budgetary deviations continue to undermine the delivery of public infrastructure projects worldwide, despite decades of reform in project management and public financial management systems. While extensive scholarship has examined cost estimation failures in large transportation and energy megaprojects, comparatively limited attention has been paid to public health and education infrastructure, sectors that are central to human capital development and social welfare. This paper addresses this gap by critically evaluating cost estimation and budgeting challenges in public health and education infrastructure projects from a global perspective.
Drawing on a comprehensive synthesis of international fiscal data, infrastructure performance studies, and institutional analyses, the study examines how macro-fiscal constraints, budget allocation frameworks, and governance arrangements shape cost estimation practices and project cost performance in hospitals, schools, and higher education facilities. The paper develops an integrated conceptual framework linking fiscal structures, budget rigidity, behavioral biases, and institutional capacity to systematic underestimation and subsequent cost escalation. Empirical evidence from global datasets and sector-specific studies reveals that cost overruns in health and education infrastructure are pervasive across income groups, with average overruns frequently exceeding 20–40%, reflecting structural rather than context-specific failures.
The findings demonstrate that cost estimation inaccuracies are not merely technical errors but are deeply embedded in political and institutional incentive systems that prioritize project approval over delivery realism. By explicitly connecting cost estimation processes to public budgeting mechanisms, the study advances infrastructure governance theory beyond project-level explanations. The paper concludes by outlining policy-relevant implications for improving estimation accuracy, strengthening budget credibility, and enhancing value for money in public health and education infrastructure investment.