The dark legacy of megaprojects: A case of local disengagement, missed opportunities, and social value dissipation

Abstract

Megaprojects can foster modernization and enhance social and economic development but also perpetuate poverty and deprivation. This dark legacy is fostered by weak governmental structures, where local communities lack representation and social welfare is sacrificed for economic gain. Through a normative stakeholder theory and social value perspective, we examine the nuanced interplay between local authorities and the project owner organization in the controversial case of Brazil's Suape Port. The substantial economic gains triggered by the Suape megaproject did not improve the social conditions for local communities. While the original business case primarily focused on economic profitability, the disengagement of local authorities and their communities prevented benefits from materializing at the local level. By examining these missed opportunities, we introduce the concept of value dissipation to explain how social value diminishes over time, resulting in a shortfall in social benefits and a poor legacy for local communities.