Explaing low economic return on Norwegian road projects

Norwegian road investment projects have generally low economic return. The reasons for this have been explored. A regression analysis reveals, not surprisingly, that projects in remote areas and/or in areas of difficult topography have lower estimated net benefits. Differences in policy and in the design and implementation of each project could further result in low economic return in Norway. To tackle this, we recommend putting more emphasis on net benefits in the decision-making, but also to make any conflict of interest transparent, so as to facilitate the trade-off between economic efficiency and other concerns, like regional policy and redistribution. We further recommend a critical review of current standards and requirements for road design and to explore the possibilities for cutting costs and increasing net benefits through new forms of contracts and a more efficient co-operation between the Public Roads Administration, its contractor and the local stakeholders and decision-makers.