February 6, 2014 2:42PM # Edwards’ Law of Government Cost Overruns By [Chris Edwards](https://www.cato.org/people/chris-edwards) --- SHARE Here is a rule of thumb to remember when you hear about a proposed government project: If a politician says that it will cost $1, it will end up costing $2 or more. Call it Edwards’ Law. [A never-ending stream of articles](http://www.downsizinggovernment.org/blog?field_themes_tid=26&field_departments_target_id=All&page=2) reveals the chronic cost overrun problems of government weapon systems, computer upgrades, highway projects, and many other things. [The government said](http://www.downsizinggovernment.org/edwards-budget-law) that a ship would cost $220 million, and it ended costing $440 million. [The government said](http://www.downsizinggovernment.org/another-cost-overrun-government-infrastructure) that a bridge would cost $1.4 billion, and it ended up costing $6.4 billion. [The government said](http://www.downsizinggovernment.org/government-cost-cutting-leads-cost-overruns) that an office consolidation would cost $1.1 billion, and it ended up costing $2.6 billion. What is the hidden force behind Edwards’ Law? Are governments simply inept, or do they deliberately low-ball initial cost estimates in order to get projects approved? After reading about dozens—probably hundreds—of such incidents over the years, I think the answer is both. Regarding low-balling, David Boaz pointed out to me [this admission from former San Francisco Mayor Willie Brown](http://www.sfgate.com/bayarea/williesworld/article/When-Warriors-travel-to-China-Ed-Lee-will-follow-4691101.php): > “News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone.” > > > We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. > > > In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. > > > The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.” Based on Brown’s insight, Edwards’ Law can be reformulated: If a politician says that a project will cost $1, that’s just the down payment. The balance due will be at least another $1. [See here for more on cost overruns](http://www.downsizinggovernment.org/government-cost-overruns). ##### Related Tags [Government and Politics](https://www.cato.org/government-politics), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).