Accelerating infrastructure permitting: from streamlining to structured bargaining

Infrastructure is essential for economic development, public services delivery, strengthening resilience and governments’ ability to respond to crisis. Permitting plays a central role in infrastructure delivery. It protects the interest of different stakeholders through environmental assessment, public consultation and judicial review among others. It also provides the institutional process through which governments, project promoters and affected stakeholders exchange information, raise concerns, and influence project design.

Yet, permitting is also a major bottleneck for timely and cost-effective infrastructure delivery. Most projects can spend many years moving from the decision to invest to the start of construction. During this gestation period, permitting affects not only when projects are delivered, but what is ultimately built and at what cost. It is globally established that projects experience the greatest cost increases before the actual procurement.  Evidence from Sweden, for example, shows that transport projects increase in real cost by around 30% on average between the decision to build and the launch of procurement.  

Permitting delay has two major and interrelated sources. The first is administrative: fragmented responsibilities, duplication, sequential procedures and limited capacity. The second is political: open-ended bargaining over how general environmental and stakeholder protections should apply to a particular project. Streamlining addresses the first. It does not resolve the second. 

Disagreement over major infrastructure is inevitable in democratic societies. Legislation cannot exhaustively prescribe what constitutes a significant impact, adequate mitigation or an acceptable alternative in every case. These questions must be resolved project by project. The problem is not that bargaining occurs, but that it is often ad hoc and open-ended, without a credible route to closure.

Governments have introduced statutory deadlines, one-stop shops, digital platforms and accelerated regimes for priority projects. These reforms can reduce duplication and substantially reduce administrative delay. The OECD report therefore recommends that governments deepen these efforts, strengthen the capacity of permitting authorities, and improve performance data and benchmarking.

But procedures cannot be simplified indefinitely, and many permitting decisions involve standards that cannot be applied mechanically. Authorities and stakeholders must judge what constitutes a significant impact, adequate mitigation or an acceptable alternative.

In practice, this can become open-ended bargaining. Objections lead to additional studies; studies prompt redesign; redesign generates new impacts; and new impacts reopen consultation. As more time and political capital are invested, project promoters become less able to withdraw and more exposed to demands for additional mitigation, compensation or scope changes.

In this way disagreement migrates into the procedures that remain—through additional studies, repeated consultation, redesign, political intervention and litigation. Initial gains from streamlining therefore diminish over time.

The OECD work proposes structured bargaining as the missing complement to administrative streamlining. Structured bargaining means resolving project-specific trade-offs within rules established in advance. In practice, it operates through a structured negotiation process defining who participates, what is open to negotiation, which evidence and valuation principles apply, what remedies are available, how long negotiation may continue and how unresolved issues will be decided. The underlying economic logic draws on Ronald Coase’s work on bargaining and transaction costs.

A structured negotiation process would not replace environmental assessment, participation or judicial oversight. It would structure the way legitimate but competing claims are translated into project design, mitigation and compensation, making that process more transparent, proportionate and conclusive.

Agreements reached through the negotiation would be incorporated into the permit or another binding instrument. Issues that remain unresolved when the negotiation period ends would pass to a predefined decision-maker, such as an expert panel, tribunal or authorised public body applying criteria established at the outset.

Structured bargaining is a design principle, not a single procedural template. The structure of the negotiation and the remedies available should be calibrated to the nature of the impacts and affected interests.

For discrete and measurable impacts, much of the negotiation may be structured in advance through compensation rules. Construction-noise compensation, for example, could follow published exposure thresholds, duration criteria and payment formulas.

Where projects affect several interconnected interests—such as biodiversity, farmland, businesses, communities and multiple public authorities—the structured negotiation may instead need to develop an integrated package of mitigation, compensation and design measures.

The mechanism should be calibrated to the nature of impacts and affected interests. The figure illustrates a continuum of structured approaches, from largely pre-defined compensation to more negotiated packages.

Structured negotiation is designed to make permitting faster, more predictable and more proportionate without weakening protection. It can focus evidence and remedies on the most material impacts, give affected stakeholders a clearer role in shaping outcomes, reduce repeated studies and redesign, and prevent project scope from remaining indefinitely open to renegotiation.

Successful implementation requires credible representation, common evidence, transparent remedies, enforceable outcomes and expertise in process design, valuation and facilitation. These requirements should be developed and tested through carefully selected pilots.

The next step is practical application. The OECD is seeking to work with governments, and infrastructure authorities, and state-owned enterprises to pilot structured negotiation processes on suitable projects. Pilots would adapt the framework to national legal and institutional settings, test alternative forms of representation and decision-making, and evaluate effects on time, cost, environmental protection and participation.

Those interested in developing a pilot can contact govinfoipp@oecd.org.

The structured bargaining framework emerged from a multi-year OECD examination of infrastructure permitting across member countries. The work combined comparative analysis of permitting reforms, evidence on project delays and cost growth, legal and economic analysis, consultations with public authorities and practitioners, and discussion at OECD expert events.

The analysis began with administrative streamlining but showed that persistent delay could not be understood without examining how project-specific environmental and stakeholder trade-offs are resolved. This led to the structured bargaining framework developed in the master report and its proposed implementation through structured negotiation processes in country and project pilots.