Social scientist Bent Flyvbjerg described the selection of government-funded infrastructure projects as “survival of the unfittest” because proponents of those projects systematically exaggerate the benefits and underestimate the costs. President Trump’s proposed border wall with Mexico provides a striking example of this: A wall along the border with Mexico will likely cost about $59.8 billion to construct.
The Office of Management and Budget (OMB) recently sent a letter to Congress where it argued that $5.7 billion would pay for approximately 234 miles of a new physical steel barrier along the border. That new estimate comes to about $24.4 million per mile. This new OMB estimate is 41 percent more costly than the approximately $17.3 million per mile construction costs that the Department of Homeland Security (DHS) estimated just a few years ago, 2.7 times as expensive as Mitch McConnell and Paul Ryan estimated, and 5 times as expensive as Trump’s lowest estimate.
Even worse, the $24.4 million per mile estimate does not include the large cost overruns for government construction projects. Applying a conservative 50 percent cost overrun estimate to building the border fence brings the total price tag to approximately $36.6 million per mile. Building a steel fence along the remaining 1,637 miles of Mexican border not covered by pedestrian fencing would cost approximately $59.8 billion, excluding any maintenance costs.
There are a few caveats about the above estimate.
First, the 50 percent cost overrun estimate is conservative. A small sample of large construction projects selected by my colleague Chris Edwards shows that cost overruns boost total project costs by an average of 3.3 fold. The cost of the border fence is thus very likely to be more than double what I estimate above.
Second, this estimate is for the steel bollard barrier and not a concrete wall. In other words, the currently proposed steel border fence is far cheaper than the concrete and steel wall originally proposed by President Trump. Making it out of concrete could more than double the price.
Third, our cost estimate does not include the low-ball $864,353 annual per mile cost of maintaining the current border fence – which is likely a lot less expensive than repairing the barrier that has been proposed by Trump.
Fourth, the OMB’s cost estimate per wall is more in line with previous Trump administration requests than estimates made by organizations that are ideologically committed to building a wall regardless of the cost to taxpayers.
Since 2017, administration officials at the OMB have been relatively consistent in estimating that the government cost of building a border wall is around $24 million per mile. However, the incentives for and history of government agencies systematically underestimating the costs of government construction projects makes this the lowest possible estimate. If it is built for about $24.3 million per mile than it would be the first time that a large government construction project has come in at or below cost in a very long time.
The cost of the border wall keeps getting higher, the border wall keeps becoming less of a wall, and the administration keeps promising that it will cover less and less of the border. At this rate, President Trump might end his administration with less fencing than he began it.