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....
There is ZERO accountability for performance in government including bringing something in on time and budget. Because so many government programs are multi-decades long (coming up on a full century for Social Security now), the originators have moved on, retired or died. So there is no way to hold them to account.
If we were honest about the abysmal performance of government and horrendous cost/benefit results, we would shut down 90% of government. But so many people are happy to slog through their miserable lives in slums with crumbs from the government that it can’t be shut down.