Effects of Corruption on Public Infrastructure Projects in Developing Countries

Abstract

Construction projects are capital -and labour- intensive with complex financial profiles. Due to this inherent complexity, construction projects are adversely affected by corruption, especially in underdeveloped countries. To emphasize the seriousness of the issue and to eradicate corruption in construction projects, a comprehensive understanding of the effects of corruption is needed. Therefore, the current study examined the impacts of corruption on public infrastructure projects (PIPs) in the corrupt context of a developing country. 27 impacts of corruption were identified through an extensive literature review and expert interviews. To rank these factors, a structured questionnaire survey was carried out to collect empirical data from different contractual parties working in various construction projects in Pakistan. The results demonstrated that corruption is widespread in the local construction industry and has harmful impacts on projects and society in the forms of the creation of monopoly, increased procurement and maintenance costs and lower-quality products. The results also revealed that the construction community believes that corruption is beneficial in that it reduces time delays and can motivate workers. The findings of the study contribute to an in-depth understanding of the consequences of corruption in public infrastructure projects. This information would be useful for project personnel, stakeholders and engineering society to enhance awareness among the parties for eradication of corruption in construction.