Cost‑Governance Mechanisms for Mitigating Budget Overruns in Large‑Scale Infrastructure Projects

Abstract

Large‑scale infrastructure projects are widely plagued by budget overruns. Existing research suffers from disciplinary paradigm fragmentation, causal‑identification bias and one‑sided research perspectives, lacking an integrated collaborative governance system that combines engineering and financial practices. This paper proposes an original theoretical framework of the Engineering‑Financial Governance Nexus and establishes a four‑dimensional cost‑governance system. Based on a sample of 142 large‑scale infrastructure projects across Europe, America and Australia spanning 2010‑2023, empirical research is conducted with multiple cutting‑edge econometric methods. The results indicate that full‑cycle CPA audit supervision serves as the core mediating hub (β = ‑0.28, p < 0.001), which constitutes a necessary condition for low‑overrun control. After correcting endogeneity bias, the complete governance system reduces the average budget‑overrun rate by 21.7 percentage points, and three equivalent governance paths are identified. Counter‑factual simulation verifies that full implementation of the governance mechanisms can cut the project overrun rate from 31.2 % to 8.7 %, delivering particularly prominent quality‑control effects for U.S. federal infrastructure projects. This study improves the theory of infrastructure cost governance and provides quantitative practical evidence for optimizing federal infrastructure supervision.