Linda Bilmes presented an interesting paper (not online) at the AEAs looking at the fiscal stimulus in light of Katrina, Iraq and the Big Dig. Here are some key grafs:
A good play to start looking for lessons is by analyzing the three biggest recent examples of heavy government spending on infrastructure: the Iraqi reconstruction effort, Hurricane Katrina reconstruction, and the Big Dig artery construction in Boston. Let me start by pointing out that all of these were plagued by a number of serious problems.
Iraqi reconstruction: [T]he Special Inspector General for Reconstruction, Stuart Bowen,…has found that the effort has been riddled with cost overruns, project delays, fraud, failed projects and wasteful expenditures…even though the first tranche of $19 billion in Iraqi reconstruction money became available in October 2003, the Defense Department did not issue the first requests for proposals for this money until 10 months later…
Hurricane Katrina: …the US has appropriated, over $100 billion in short and long term reconstruction grants, loan subsidies [etc]…GAO found that FEMA made over $1 billion–or 16% of the total in this particular category–in fraudulent payments…items like professional football tickets and Caribbean vacations.
The Big Dig: …the largest single infrastructure project in the US…many lessons on how not to run a project…officially launched in 1982, but it did not break ground until 1991, due to environmental impact statements, technical difficulties and jurisdictional squabbles…not "completed" until 2007.
Bilmes is the co-author with Joseph Stiglitz of The Three Trillion Dollar War.