Why Do Some Municipalities Build Useful Projects and Others White Elephants?
- Editorial
- 3 hours ago
- 4 min read
The difference lies not only in the available budget, but also in the institutional ability to diagnose problems, evaluate alternatives and sustain each project after its inauguration.
Every municipal administration wants to leave behind a visible public work. A plaza, market, park, sports complex or cultural center provides immediate evidence of government action. Yet when the political term ends, some projects continue generating economic activity and well-being, while others remain empty, deteriorate or become a burden on the municipal budget.
The difference rarely begins during construction. It starts earlier, with the way the problem is identified, demand is estimated, the solution is chosen and long-term operation is guaranteed.
“A white elephant is not born when it is abandoned; it is born when it is approved without proving that anyone needs it.”
Failure begins before the first stone
Municipal projects face a political distortion: building something new creates greater visibility than maintaining, repairing or reorganizing an existing service. Budget calendars and government terms also favor projects that can be announced quickly, even when their usefulness has not been demonstrated.
This produces the wrong question: “What can we build with the available funding?” The right one is: “What public problem must we solve, and which alternative is the most efficient?”
When a grant, supplier or architectural proposal arrives before the diagnosis, the municipality adapts the need to the available money. A project can comply with its contract, remain within budget and still fail socially and economically.
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The economic cost of decisions without evidence
According to INEGI’s 2025 National Census of Municipal Governments and Mexico City Boroughs, municipal public works contracts and related services represented MXN 211.9 billion in 2024. Direct awards accounted for 54.2% of that amount.
This procedure does not by itself prove wrongdoing. However, it involves less exposure to open competition and therefore requires stronger technical justification, public traceability and oversight. Risk increases when closed contracting coincides with weak project files and an absence of performance indicators.
The OECD recognizes subnational governments as central public-investment actors. A poor municipal decision does more than waste money: it ties up land, displaces higher-priority investments, creates recurring costs and erodes public trust.
From building infrastructure to guaranteeing services
A useful project must pass four tests. First, the problem must be demonstrated with evidence about users, location, demand and the consequences of taking no action.
Second, alternatives must be compared. Constructing a new building is not always the best response. Renovating existing facilities, sharing infrastructure with neighboring municipalities, temporarily purchasing a service or improving current operations may produce greater value.
Third, the full cost must be calculated. The World Bank recommends analyzing costs and benefits throughout an asset’s useful life. This includes staff, energy, security, insurance, connectivity, maintenance and equipment replacement. Mexico has methodologies such as the CEPEP socioeconomic evaluation guide, but their application must become more deeply embedded at the municipal level.
Finally, governments must establish who will operate the infrastructure, with what budget and under which indicators. Without an operator, users and maintenance, a completed building is not yet a public service.
León: continuity before improvisation
The Integrated Transportation System in León, Guanajuato, illustrates the importance of preparing and sustaining projects beyond a single administration. World Bank documents indicate that Optibús emerged from a transportation master plan and that feasibility studies guided its subsequent expansion.
In 2024, the municipal government of León reported that the system carried 440,000 passengers daily. Its relevance does not depend on a single terminal or corridor, but on institutional continuity, integrated routes and an operating model. The infrastructure works because it is part of a service, not because it was inaugurated as an isolated structure.
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Evidence also corrects intuition
An evaluation supported by the Inter-American Development Bank examined interventions in Campo Grande, Brazil. Road improvements generated an estimated return of USD 4.25 for every dollar invested. Urban park interventions, meanwhile, produced no detectable effect on property values.
This does not mean the parks lacked environmental, recreational or social benefits. It means the expected impact could not be demonstrated using the indicator examined. The broader lesson is more important: every investment needs a testable hypothesis, adequate operating conditions and subsequent evaluation that allows governments to correct their decisions.
Institutions that outlast administrations
Mexico needs municipal project pipelines prepared before funding becomes available. Every project file should include a diagnosis, alternative solutions, life-cycle costs, risks, maintenance funding, a designated operator and public indicators.
Municipalities also require technical units capable of preserving knowledge between administrations and citizen dashboards for monitoring results. As the OECD Effective Public Investment framework proposes, investment quality depends on coordination, institutional capacity and transparency throughout the project cycle.
Public participation should validate needs and usage patterns, not merely choose among previously defined projects.
“Public infrastructure derives its value from the service it sustains, not from the photograph of its inauguration.”
An effective municipality is not the one that holds the most groundbreaking ceremonies. It is the one that transforms every invested peso into lasting services, productivity and public trust. Before the next municipal project is approved, will citizens be able to know which problem it will solve, how much it will cost to maintain and how its usefulness will be measured?
Written by: Editorial
#LocalGovernance #PublicInvestment #MunicipalInfrastructure #InfrastructureGovernance #MunicipalManagement
Sources Consulted
INEGI. National Census of Municipal Governments and Territorial Demarcations of Mexico City 2025. View source.
Municipality of León. León’s Integrated Transportation System Serves 440,000 Daily Users. View source.
World Bank. Public Investment Management Reference Guide. View source.
CEPEP. General Guide for Cost-Benefit Evaluations. View source.
OECD. Recommendation on the Governance of Infrastructure. View source.
Inter-American Development Bank. The Impact of Upgrading Municipal Infrastructure on Property Prices: Evidence from Brazil. View source.
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