Undercover Economist

What the Sydney Opera House teaches us about Brexit

Go down to Bennelong Point and make such progress that no one who succeeds me can stop this going through to completion.” That is how the ailing Joseph Cahill ensured that the Sydney Opera House would be built — at least according to one of his successors.

Excavations for the project duly began at Bennelong Point. Cahill, the premier of the state of New South Wales, died of a heart attack not long after. The Sydney Opera House was indeed completed, but in 15 years rather than five and at a cost of A$102m rather than A$7m — a truly impressive cost overrun of nearly 1,400 per cent.

Brexit, it seems, is also likely to overrun its original schedule, to the surprise of nobody who has been paying attention. I decided to look up Bent Flyvbjerg, perhaps the world’s leading authority on “megaprojects”, large and ambitious endeavours such as hosting the Olympic Games, building a high-speed rail line, or overhauling a big IT system. Such projects often — although not always — go badly wrong.

Is it useful, then, to think of Brexit as similar to a large construction or IT project? Professor Flyvbjerg’s answer: Yes, it’s a very useful analogy indeed. But, given the failure rate of megaprojects, it is not an encouraging one.

Brexiters will point out that some megaprojects live up to their promise, most famously the Guggenheim Bilbao— a tenacious, visionary scheme delivered on time, on budget and with benefits outstripping any reasonable expectations. Remainers anticipate the best-case Brexit scenario to be something more like the NHS National Programme for IT, abandoned after a decade and several billion pounds of wasted money.

Whichever side of this debate you are on, there is much to be learned from studying megaprojects. I gleaned six pieces of counsel from Prof Flyvbjerg to improve chances of successfully delivering a complicated project. Checking the list against what is happening with Brexit makes my heart sink.

First: prepare thoroughly. This one is awkward. Civil servants were banned by David Cameron’s government from preparing for Brexit before the referendum. Then, for her own reasons, his successor as prime minister, Theresa May, scrambled to begin the Article 50 countdown. “Zero preparation”, says Prof Flyvbjerg, “is as bad as it gets”.

Second: try to de-bias yourself, noting and adjusting for overconfidence, wishful thinking and other well-known cognitive biases. Alas, most British politicians are wary of seeming negative or timid about Brexit, for fear of implying the electorate was unwise. Instead, both government and opposition have embraced the goal of leaving while enjoying all the benefits of staying — hardly a clear-eyed exercise in spotting obstacles.

Third: choose an experienced team. Hmm . . . Sir Ivan Rogers, the UK’s ambassador to the EU and an experienced negotiator abruptly resigned early in the process.

Fourth: try to break a large project into smaller, standalone chunks, so that the failure of one is not a failure of everything. When everything is interconnected, small obstacles can snowball into major delays. (See also: The Irish border.) The logic of both politics and of diplomatic negotiation for Brexit points in the opposite direction: “nothing is agreed until everything is agreed”.

Fifth: key decision makers should be aligned, with everyone having an incentive to make things move smoothly. Alas, politics (again) pushes in the wrong direction here. Many of the people with power to smooth the way for Mrs May, from opposition leader Jeremy Corbyn to the former foreign secretary Boris Johnson to the EU’s chief negotiator Michel Barnier, have the incentive to make things difficult for her in one way or another.

Finally: have an early warning system so problems can be spotted and fixed before they grow. Yet warnings are routinely derided as “Project Fear”.

Even without political pressures, megaprojects are hard to deliver on time and on budget: their sheer scale opens up a thousand ways for things to go wrong. But they are always somewhat political, and Brexit is more political than most. Even as a pure organisational challenge, it is likely to take far more time and money than advertised.

The Sydney Opera House itself is, of course, a stunning achievement. But unlike the Guggenheim Bilbao it is an achievement built on lies. Those lies came from politicians who decided that an honest account of the likely costs would not achieve their goals. They tarnished the reputation of Jørn Utzon, the architect who became the scapegoat for their impossible promises. Lauded far too late, he received no other major commissions and never saw the finished Opera House. Would the truth really not have served?

As far as Brexit is concerned, we have dashed down to Bennelong Point and started shovelling frenetically, desperate that no one should “stop this going through to completion”. Perhaps one day we will get the Sydney Opera House, although that seems unlikely. At the moment, we’re at the bottom of a deep hole and we are still digging.


Written for and first published in the Financial Times on 26 October 2018.

My book “Fifty Things That Made the Modern Economy” (UK) / “Fifty Inventions That Shaped The Modern Economy” (US) is out now in paperback – feel free to order online or through your local bookshop.

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