Estimates are always wrong because they don’t take the kick-backs and theft into account. They are added later and the figures adjusted up.
It’s not strictly a governmental thing; I think we all do it, even in our personal lives. And often with the very best of intents. For example, if we really knew the cost of raising children, would we be so eager to create our families?
Having worked both public and private gigs over the past 40 (!!!) years, I’ve also observed that “estimated” costs are kept low in order that proposals might seem more attractive and compete more successfully come budget time. HOWEVER, it is FAR more common in the public sector; spending other people’s money, with little fear of repercussions in the face of failure, DOES tend to darken the tint of one’s rose-colored glasses.... The idiocy of romantic political dreams also is a huge factor....
DITTO to #2.
And #2 is appropriate for the graft. Plunkitt of Tammany Hall says that there are two kinds of graft, good graft = ours and bad graft = theirs.
And the price is always low when the project is proposed in order to get it accepted and no project is ever terminated just because the cost is 10 times what was projected.