Public works (or internal improvements historically in the United States)[1][2][3] are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community. They include bridges, parks, roads, municipal buildings, dams, railroads, schools, hospitals, beaches, and other, usually long-term, physical assets and facilities. Though often interchangeable with public infrastructure and public capital, public works does not necessarily carry an economic component, thereby being a broader term.
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Public works is a multi-dimensional concept in economics and politics, touching on multiple arenas including: recreation (parks, beaches), aesthetics (trees, green space), business (goods and people movement), law (police and courts), neighborhood (community centers, social services buildings). Essentially, it represents any constructed object that augments a nation's physical infrastructure such as airports, canals, dams, dikes, pipelines, and others.
Municipal infrastructure, urban infrastructure, and rural development usually represent the same concept but imply either large cities or developing nations' concerns respectively. The terms public infrastructure or critical infrastructure are at times used interchangeably. However, critical infrastructure includes public works (dams, waste water systems, bridges, etc.) as well as facilities like hospitals, banks, and telecommunications systems and views them from a national security viewpoint and the impact on the community that the loss of such facilities would entail.
Furthermore, the term public works has recently been expanded to include digital public infrastructure projects. The first (US) nationwide digital public works project is an effort to create an open source software platform for e-voting (created and managed by the OSDV).[4]
Reflecting increased concern with sustainability, urban ecology and quality of life, efforts to move towards sustainable municipal infrastructure are common in developed nations, especially in European Union and Canada (where the FCM InfraGuide provides an officially mandated best practice exchange to move municipalities in this direction).
A public works programme (PWP) is the provision of employment by the creation of predominantly public goods at a prescribed wage for those unable to find alternative employment. This functions as a form of social safety net. PWPs are activities which entail the payment of a wage (in cash or in kind) by the state, or by an Agent (or cash-for work/CFW). One particular form of public works, that of offering a short-term period of employment, has come to dominate practice, particularly in regions such as Sub-Saharan Africa. Applied in the short term, this is appropriate as a response to transient shocks and acute labour market crises.[5]
While it is argued that capital investment in public works can be used to reduce unemployment, opponents of internal improvement programs argue that such projects should be undertaken by the private sector, and not the public sector, because public works projects are characteristic of socialism. However, in the private sector, entrepreneurs bear their own losses and so private sector firms are generally unwilling to undertake projects that could result in losses or would not develop a revenue stream. Governments will invest in public works because of the overall benefit to society when there is a lack of private sector benefit (a project that will not generate revenue) or the risk is too great for a private company to accept on its own.
Cost overruns and demand shortfalls frequently haunt public works projects.[6] The main causes of cost overrun and demand shortfall are optimism bias and strategic misrepresentation (Flyvbjerg et al. 2002, 2005). Reference class forecasting was developed to curb optimism bias and strategic misrepresentation and thus arrive at more accurate estimates of costs and demand.[7]
According to research conducted at the Aalborg University, 86% of public works projects end up with cost overruns. Some unexpected findings of the research were that:
Generally contracts awarded by public tenders will include a provision for unexpected expenses (i.e. cost overruns), that typically amount to 10% of the value of the contract. This money is only spent during the course of the project if the construction managers judge that it is necessary, and typically the expenditure must be justified in writing.
Individual programs: