Strategic Misrepresentation

Bent Flyvbjerg's term for the systematic, deliberate distortion of costs, benefits, and risks in project proposals—lying about project prospects to get them approved. Unlike optimism bias (genuinely believing inflated projections), strategic misrepresentation is DELIBERATE: promoters knowingly understate costs and overstate benefits because accurate projections would kill the project. Infrastructure projects average 28% cost overruns. IT projects average 45%. The pattern is universal: promoters have incentives to misrepresent, approvers lack incentives or ability to verify, and by the time the truth emerges, the project is too far along to cancel (sunk costs).

When to use it

When project proposals seem too good to be true (they probably are); when historical project performance consistently falls short of proposals; when designing approval processes that need to be resistant to promoter bias; when evaluating any proposal from someone with an incentive to inflate projections.

How it can help

For any project proposal: apply reference class forecasting (how did similar projects actually turn out?) rather than relying on the proposer's inside-view projections. Require independent cost estimation by parties without a stake in the project's approval. Build in contractual accountability: tie payments to actual performance, not projected performance. The most effective intervention: change the incentive structure so that accurate forecasting is rewarded and misrepresentation is penalized. As long as promoters benefit from optimistic projections and bear no cost for overruns, strategic misrepresentation will continue.