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10.37547/tajpslc/Volume07Issue03-08
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Vol.07 Issue03 2025
CITATION
U. Saydakhmedov, & Abdurakhmatova Kamola Murodjon qizi. (2025). The
concept of corruption in construction supervision and implementation, its
causal factors and forms. The American Journal of Political Science Law and
Criminology, 7(03), 49
–
56.
https://doi.org/10.37547/tajpslc/Volume07Issue03-08
COPYRIGHT
© 2025 Original content from this work may be used under the terms
of the creative commons attributes 4.0 License.
The concept of corruption
in construction supervision
and implementation, its
causal factors and forms
U. Saydakhmedov
Independent researcher of Supreme School of Judges, PhD, Professor,
judge, Uzbekistan
Abdurakhmatova Kamola Murodjon qizi
Researcher of the Law Enforcement Academy of the Republic of
Uzbekistan, Uzbekistan
Abstract:
This article analyzes the concept of corruption
in the control and implementation of construction, the
factors causing corruption, the views of foreign
scientists in this regard, the specifics and forms of
corruption in the construction industry.
Keywords:
Corruption, corruption in the field of
construction control, causes of corruption, forms of
corruption.
Introduction:
Nowadays, corruption is an extremely
dangerous and widespread destructive phenomenon
that exists in almost all spheres of modern society. The
manifestation of corruption significantly complicates
the solution of acute social problems, weakens the
population's trust in the government, discredits laws in
the eyes of society, and ultimately contributes to the
aggravation of social tensions.
Although there is no single definition of corruption, it is
widely recognized that it involves the abuse of entrusted
power by individuals or institutions in the public and
private sectors for personal gain. Corruption negatively
affects all segments of society and causes unfair
distribution of resources and misallocation of public
funds. This can lead to a decrease in public confidence
in the government and the legal system. Corruption also
threatens human rights and undermines the rule of law,
democracy, and economic development.
In the words of our head of state, since the emergence
of the state and society on earth, mankind has assessed
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The American Journal of Political Science Law and Criminology
bribery and corruption as one of the social vices that
hinder the prevalence of the principles of justice,
equality, healthy competition and integrity in society,
and has fought against it throughout history.
According to the provided Uzbek text, corruption is
prevalent in the construction industry, much like many
other sectors, due to various reasons. The large sums
of money directed towards construction projects
contribute to price inflation and conceal substantial
bribes. The global construction market is estimated to
be worth 3,200 billion dollars annually. However,
according to data from the American Society of Civil
Engineers, corruption accounts for 340 billion dollars
of construction value worldwide each year.
The construction industry has consistently been
identified as one of the most corrupt sectors
worldwide. According to the Bribe Payers Index from
2011, the level of corruption in construction exceeded
that of any other sector of the economy (Transparency
International, International Secretariat, 2011).
Reports released by the Organisation for Economic Co-
operation and Development (OECD) (2014) state that
corruption amounts to approximately 2.6 trillion
dollars annually, representing 5 percent of global gross
domestic product (GDP), with roughly 1 trillion dollars
taking the form of bribes. Furthermore, as highlighted
by Charles Kenny, a researcher at the Center for Global
Development, the construction industry is valued at
1.7 trillion dollars internationally and accounts for 5-7
percent of many countries' GDP.
The construction sector is characterized as the most
corrupt industry in the world. When Transparency
International last released its "Bribe Payers Index" in
2011, it was revealed that the public works contracts
and construction sector ranked last on the list of
industries prone to bribery. Corruption in the industry
can range from fraud to extortion, embezzlement, and
other abuses.
According to the "Global Construction Futures" report,
a major study of the global construction and
engineering industry published by the team of
construction economists at Oxford Economics, the
global construction market represents a very large
value and is projected to grow to nearly 14 trillion
dollars by 2037.
Furthermore, analysis by the Anti-Corruption Research
Centre at the Michelsen Institute in Norway suggests
that approximately 10-30% of the value of
government-funded infrastructure is lost each year
due to corruption.
Based on the above statistical data, it can be said that
because corruption incidents occur more frequently in
the construction sector, it is important to constantly
seek innovative measures to prevent global and
domestic losses.
Invariably, as a country with a developing construction
industry, our country is not immune to corruption in the
construction sector. Therefore, taking into account the
importance of this issue, the purpose of this article is to
clarify the concept of corruption in the industry, identify
its main causes and forms, and bring them to the
attention of the bodies responsible for construction
projects.
From this point of view, based on the specifics and wide
scope of the construction industry, it is a requirement of
the time to scientifically and legally investigate the
activities of identifying, preventing, eliminating and
combating the factors that cause corruption in the
industry.
Corruption in compliance with building codes is
associated with widespread building defects and loss of
life in disasters. Recent statistics show that 83 percent
of earthquake deaths in the last three decades have
occurred in the most corrupt countries, as identified by
Transparency International.
Before defining the concept of corruption in
construction oversight, let's first examine the word
"corruption," which does not have a single definition.
The word expresses different meanings in various
contexts. Corruption originated from a medieval Latin
word, representing moral decay, wicked actions, filth, or
deterioration.
The root of the word "corruption" is in the Latin
adjective "corruptus," which means broken, damaged,
or destroyed.
Corruption is typically described as any actions that
violate societal norms for the sake of gaining status,
money, or income.
As a rule, corruption has various definitions depending
on context and scale. One of the most widespread
definitions is provided by the World Bank as follows:
"offering, giving, receiving, or soliciting, directly or
indirectly, anything of value to influence the actions of
another party".
Additionally,
Transparency
International
defines
corruption as the abuse of entrusted power for personal
gain.
Although the negative consequences of corruption are
well-known and noticeable, a single definition is not
sufficient to express the term. As noted by Michael
Johnston, a political scientist from Colgate University,
this term originates from the Latin word "corruptio" and
means "moral decay, rottenness, filth, or bad behavior".
Additionally, U. Myint, a professor of economics from
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Myanmar, defines corruption as the use of a state
position for personal gain, or in other words, the
utilization of an official position, title, or status by its
holder for personal benefit.
In reality, corruption in the construction sector
undermines societal values, impedes decision-making,
reduces project quality, consequently shortens the
service life of buildings, deprives the majority of the
population of a quality life, and most importantly,
among other devastating and harmful effects,
seriously impacts human life or leads to losses.
For this reason, all participants in this sector, including
specialists, clients, and the government, must
collaborate to collectively solve this problem.
Regarding the concept of corruption in the
construction sector, scientists have provided various
definitions.
One group of scientists, led by Lee and others, view
corruption in the construction sector as appropriating
powers given through construction projects.
Opoku and colleagues, who studied the causes of
corruption in the Thai construction industry, defined
corruption as fraud, offering, accepting, requesting,
violations, unfair treatment, and misusing work hours
for personal gain.
After analyzing existing literature, we found a scarcity
of scientific definitions for the concept of corruption in
the construction sector, and we did not encounter a
specific definition for corruption in construction
oversight and implementation.
Nevertheless, by generalizing the above definitions, we
attempted to provide the following definition:
Corruption
in
Construction
Oversight
and
Implementation
–
is a process of interest exchange
among participants, i.e., subjects of construction
implementation and oversight, which involves
offering, giving, providing illegal economic incentives,
receiving, or requesting valuable items to influence the
actions of an official with construction oversight
authority, deliberately misusing their powers to obtain
illegal personal benefits, not performing their duties
fairly, and violating weak oversight and professional
responsibility.
In developing effective and strategic anti-corruption
measures for construction oversight, better results can
be achieved by first understanding and identifying the
deeper causes of corruption.
To effectively control the level of corruption in
construction, it is necessary to identify the key factors
of corruption in construction.
To identify corruption, a comprehensive analysis of all
potential corruption factors that may arise in a specific
field is required.
According to B. Ismoilov and E. Gadoev, corruption
factors are social phenomena and processes that
influence the emergence, preservation, modification,
and spread of corrupt behaviors in society.
In general, preventing corruption in the construction
sector and its causes have been researched by
numerous scientists in scientific publications.
Specifically, Chinese scientists E.K. Owusu and
colleagues analyzed 37 scientific publications and
identified 44 causes of corruption in construction
project management.
They categorized these 44 causes into 5 groups: psycho-
social causes, organizational causes, regulatory causes,
project-specific causes, and legal causes.
Scientists from South Korea's Pukyong National
University, Kim Su Yong and Kiyanoush Golchin Rad,
who studied corruption causes in Iranian construction
projects through surveys and analyses, noted three
most critical factors: "Improper distribution of power",
"Lack of employee obligation to properly use resources
and follow rules", and "Absence of any government
oversight".
Fully agreeing with these views, it can be additionally
noted that the weakness and inconsistency of
construction oversight systems can also cause
corruption.
Moreover, they list twelve corruption forms identified
in previous studies of developed countries: bribery,
fraud, collusion, bid rigging, embezzlement, kickbacks,
conflict of interest, dishonesty and unfair actions,
manipulation, negligence, front companies, and
nepotism.
Lee Ping Tang and colleagues noted that corruption in
the construction sector often stems from overly close
relationships between project participants, which
provokes corrupt practices such as nepotism and bid
manipulation during the tender stage.
Researchers from Indonesia's Bung Hatta University,
Ariani and colleagues (2023), indicate at least ten
factors leading to corruption in construction projects,
including incorrect tender evaluations, improper
oversight, document proposals inconsistent with actual
conditions, close relationships between parties, and
poor professional and ethical standards.
Furthermore, a group of scientists, while analyzing the
causes of corruption, highlight the mediating role of the
ethical climate.
Specifically, American scientists Kelly Martin and John
Cullen emphasized that the ethical work environment is
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crucial for organizational culture and influences the
resolution of ethical contradictions and behaviors.
Scientists from the University of Salford in the United
Kingdom, Olusegan and colleagues, argued that the
lack of ethical norms among construction workers
leads to unethical and undisciplined behaviors,
intensifying corruption in the construction sector.
According to scientists from Indonesia's Persada
University, Fakhruddin Mart and Sabrina, the ethical
climate mediates positive relationships between
leadership and subordinates' intentions of corruption.
Supporting the above views and emphasizing that
corruption is an unethical behavior, we can say that the
ethical environment plays a significant role in the
emergence of corrupt situations in construction
oversight and implementation.
If ethical leadership and the leader's moral example
are not at a high level among state oversight agencies
and workers in the construction sector, the existence
of a low ethical environment can itself create
opportunities for corruption.
Therefore, we can note negative leadership and lack of
ethical leadership as key causes of corruption in this
sector.
This is because leadership in any field positively
influences creating an ethical environment that
reduces subordinates' intentions of corruption.
Additionally, the experience of COST (European
Cooperation in Science and Technology) - an
organization financing research and innovative
networks - shows that large-scale losses in the
construction sector can be caused by mismanagement
and inefficiency. This means that by 2030, if effective
improvement measures are not implemented,
approximately 6 trillion dollars might be lost annually
due to corruption, mismanagement, and inefficiency.
Scientists from the UK's Loughborough University, Mu
Soheil and Sue Cavill, have identified that corruption
typically emerges due to: (a) large flow of government
funds, (b) competitiveness of the tender process, (c)
lack of transparency in tender trading and selection
criteria, (d) political interference in cost decision-
making, (e) complexity of institutional roles and
functions, and (f) asymmetric information among
practitioners.
Scientists from the Indian Institute of Technology,
Tabish and Kumar Ja, emphasized the lack of a
standardized project execution system as a
fundamental cause of corruption in the sector.
Moreover, this form of lawbreaking is carried out
covertly and is extremely difficult to detect due to the
lack of access to relevant project documents or
interested parties.
By analyzing the presented opinions, views, and listed
causes and factors, it is possible to divide the causes of
corruption
in
construction
oversight
and
implementation into general and specific types.
General causes are those common to all sectors, such as
lack of transparency and accountability, while specific
causes stem from the unique characteristics of the
construction sector - the complexity of infrastructure
and the complex contractual structure of projects.
Based on the specific features of construction oversight
and implementation, we can list several unique factors
contributing to corruption:
· Uniqueness of Construction Objects. In the
construction sector, nearly no two construction projects
are exactly alike, making objective cost assessment
difficult and creating opportunities for cost inflation and
hidden bribes.
· Presence of Complex Financial Operations. The
construction sector involves numerous professional
disciplines and contractual relationships, making
effective oversight extremely challenging.
· Existence of Hidden Works. Construction materials and
products are often concealed, allowing for substitution
with lower-quality or cheaper alternatives, which serves
as a source of various types of misconduct.
· Bureaucracy. Multiple documents, licenses, and
permits must be obtained and approved at various
stages of construction implementation, creating
opportunities for corruption and bribery.
· Scale of Expenditures. Investments in engineering and
construction infrastructure, especially for complex and
unique objects, can be very large, making it easier to
hide inappropriate expenses, theft, and bribes.
Additionally, the annually increasing demand for
construction creates intense competition among service
providers. Competition often leads to corruption.
We believe the causes of corruption in construction
oversight and implementation can be divided into three
types:
Social Causes
–
human-related reasons, including the
desire to easily acquire personal wealth, lack of
professional ethical standards and moral leadership,
and low legal culture among professionals or
construction workers.
Organizational Causes
–
factors originating from
organizational structures or institutions. These include
lack of continuous and strict oversight during project
implementation, absence of transparency and
accountability, insufficient transparency in construction
regulations and processes, inadequate project
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supervision by customer representatives, and use of
low-quality materials by contractors or suppliers.
Normative or Regulatory Causes
–
insufficient legal
penalties and sanctions, lack of effective oversight
mechanisms, inefficiency of state construction
regulation systems, and low risk of detecting and
punishing corruption in construction.
Due to the volume, uniqueness, high costs, multi-stage
nature, and complexity of construction projects,
construction is considered more prone to corruption
compared to other economic sectors.
Construction sector corruption can encompass
multiple forms associated with various types of
behavior, including bribery, embezzlement, nepotism,
manipulation, money laundering, fraud, and conflict of
interest.
Below, we will review the widespread corruption forms
in the construction sector.
American famous judge and scholar John Thomas
Nunan in his 1984 work "Bribes" considers that the first
instance of corruption was recorded in the form of
bribery around 3000 BC.
Therefore, bribery continues to be considered the
primary form of corruption that has existed to this day.
However, due to the evolution of corruption over the
years, various forms of corruption have emerged, and
more money is being spent on these new forms.
Researchers from Hong Kong Polytechnic University, A.
Chan and E. Owusu, who studied corruption forms in
the construction industry, list bribery, fraud, collusion,
embezzlement, nepotism, and manipulation as the
most frequently mentioned corruption forms in
literature.
Scientists from South Korea's Pukyong National
University, Kim Su Yong and Kiyanoush Golchin Rad,
based on studies conducted in developed countries,
list twelve corruption forms in the construction sector:
bribery, fraud, collusion (conspiracy), bid rigging,
embezzlement (misappropriation), kickbacks, conflict
of
interest,
dishonesty
and
unfair
actions,
manipulation, negligence, front companies, and
nepotism.
Bribery is the most widespread and serious form of
corruption in the construction sector, especially in
developing countries.
According to Professor Winston Shakantu from Nelson
Mandela University in South Africa, bribery is
considered a large-scale corruption practice because
corruption me
ans “offering, giving, receiving, or
requesting anything of value to influence the actions of
an official during the procurement or selection process
or contract execution” .
One of the most frequently mentioned forms of
corruption is fraud.
As Australian scientists Charles Wee and Martin
Skitmore noted, fraud is also considered a widespread
form of corruption in construction. This practice
primarily occurs in the form of false, incorrect
information and calculations paid for non-existent
materials, fraudulent requests for time extensions,
intentional misleading and information concealment,
document alteration, and material theft.
Another form of corruption is collusion or conspiracy.
According to P. Bowen and colleagues, who conducted
empirical research on ethical behaviors in South Africa's
construction industry, collusion is a corruption form
where a secret agreement is reached between two or
more parties for false purposes. Collusion can benefit
participants but may sacrifice the project's or public's
basic interests.
Anna Zarkada Fraser, a researcher from Australia's Bond
University
studying
tender
process
collusions,
emphasized that collusion seriously undermines the
competitive nature of the construction industry.
Another form frequently mentioned in literature is
fraud. The Association of Certified Fraud Examiners
(ACFE), the world's largest anti-fraud organization,
defines fraud as “any activity based on deception to
achieve profit”.
Furthermore, in professional fraud, the concept of
"using one's profession to personally enrich oneself by
deliberately misusing or misappropriating an employer
organization's resources or assets" is proposed.
The construction industry is not immune to professional
fraud. According to ACFE's 2022 report for nations,
among analyzed sectors, the construction industry
ranked fourth with average losses of 2.9 million US
dollars due to fraud.
Based on the above, the main forms of corruption in
construction oversight and implementation can be
identified as bribery, embezzlement, nepotism,
influence peddling, theft of state funds or assets, fraud,
and falsification.
Additionally, we can list money laundering, shadow
economy, and shell companies as corruption forms.
It is no secret that some construction companies hide
their revenues, pay salaries "in envelopes", and spend
certain funds to resolve issues related to state
institutions.
Regarding the analysis of corruption crimes in the
construction sector in our country, the Anti-Corruption
Agency analyzed corruption crimes committed in the
Ministry of Construction and Housing and Communal
Services system in 2022-2023, along with factors
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causing these crimes. According to statistical data from
the Supreme Court of Uzbekistan, in 2023, 227
corruption cases involving 458 individuals were
completed by courts. In 2022, this indicator was 255
corruption cases involving 476 individuals. As a result
of these corruption crimes, material damage to society
and the state amounted to 100.2 billion (82.6 billion in
2022) soums.
The analysis shows that while the overall number of
corruption crimes in the sector has decreased, the
amount of damage has increased by 20 billion soums.
Most corruption crimes were committed through
abuse of position, abuse of power or official position,
and embezzlement (mostly in combination).
Analyzing the types of corruption crimes in 2023,
embezzlement through abuse of position was
committed by 423 people (428 in 2022), and abuse of
power or official position by 11 people (10 in 2022).
In the study, out of 458 individuals who committed
corruption crimes in the capital construction sector in
2023, 89 were employees of departments and
organizations under the ministry, 44 were employees
of the Inspection for Supervision of Construction and
Housing and Communal Services, and the remaining
325 were employees of other sectors or citizens.
Based on these figures, analyzing the causes and
factors of corruption crimes in the capital construction
sector revealed that the type of corruption crimes is
related to the social status of the perpetrators,
primarily involving collusion with contractors, using
fake documents to misappropriate funds, turning a
blind eye to legal violations, and insufficient legal
knowledge of sector employees. Particularly, state
funds were embezzled by introducing false information
into invoices for completed construction and
renovation works.
The report indicates that the following factors
contributed to these crimes: incomplete digitization of
functions and roles in the sector, people's attempts to
easily earn money, lack of intransigent attitude
towards anti-corruption efforts, low salaries of state
employees, weak departmental and public oversight of
sector
employees,
insufficient
anti-corruption
awareness campaigns, lack of understanding of the
negative consequences of crime, and high latency
(non-exposure) of corruption crimes in the sector .
As mentioned, corruption can emerge in various forms
and can occur in any construction activity and at any
stage of the construction process, from design to
project completion.
The International Federation of Consulting Engineers
(FIDIC) emphasizes that corruption can emerge in
decision-making on claims, issuing payment certificates
to
contractors, construction
oversight,
tender
evaluation, and other such processes.
The tender stage of construction can include collusion,
attracting funds to overstate completed work, hiding
the use of low-quality construction materials, and a
number of other actions.
Therefore, the most common corruption forms in
construction processes can be identified as follows:
Bribery
: offering or receiving bribes to secure contracts,
permits, or favorable conditions.
For example, a tender is being proposed for a contract
to build a new government agency building. The
company owner meets with the government official
responsible for awarding the contract and offers a large
sum of money to ensure the contract is given to their
company. The official agrees to accept the bribe and
ensures the contract is awarded to the construction
company, even if it is not the most qualified participant.
Bid Manipulation
: manipulating the negotiation
process between contractors, leading to price increases
and unfair competition.
Theft
: misappropriation of funds or resources for
personal gain, often through fake invoices or expenses.
For example, a company's financial specialist with
access to the bank accounts of a state or private
organization begins transferring funds from the
company's account to their personal account. They use
this money to pay personal debts and finance their
lifestyle. As stolen funds increasingly accumulate over
time, they alter financial and bank reports to hide their
actions.
Kickbacks
: illegal payments made in exchange for
awarding contracts or subcontracts.
For example, an employee or supplier responsible for
purchasing construction materials for a construction
company may agree to buy materials in large quantities
from a company with higher prices or not the best
quality, even when other suppliers offer better products
at lower prices. The seller then proposes returning a
percentage from the sale.
Extortion
: forcing or demanding payments or privileges
under the threat of disrupting or damaging construction
projects.
Fraud
: falsifying documents, misrepresenting project
costs, or providing substandard materials.
Conflict of Interest
: engaging in activities that
compromise objectivity, such as helping specific
suppliers or subcontractors for personal gain.
For example, a government official responsible for
awarding contracts for construction projects gives
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contracts to their own company or companies
belonging to their family members, despite more
qualified and competitive participants being available.
This is a conflict of interest because the official uses
their position to further personal interests,
compromising the fairness and transparency of the
procurement process.
Money Laundering
: Hiding the origin of illegally
obtained funds through construction projects.
For example, a government official in the construction
sector receives bribes from various sources in
exchange for awarding state contracts. To hide illegal
income, they open shell companies and offshore bank
accounts to transfer bribes and present them as
legitimate business operations. They then use the
laundered funds to purchase property, luxury goods,
and other assets, creating a facade of legal wealth.
CONCLUSION
In conclusion, factors causing corruption in
construction oversight and implementation refer to
actions (or inaction), situations, and processes that
obstruct the execution of construction projects in
accordance with project and construction norms and
laws, interfere with the legal activities of supervisory
officials, and pose risks to the quality of construction
objects.
Additionally, corruption-inducing factors can be
grouped or expanded into several categories.
However, these factors in construction oversight have
one common characteristic: they threaten the safety
and quality of construction objects.
Moreover, contracts and projects in the construction
sector are typically large and exclusive. Such
complexities make monitoring construction projects
difficult, which facilitates participants' engagement in
corrupt activities like bribery and embezzlement.
Furthermore, many construction projects involve
diverse and scattered stakeholders
–
government,
clients, contractors, subcontractors, supervisors,
suppliers, and others. Therefore, effectively tracking
payment details, fund movements, and other
resources in these projects is often challenging.
Additionally, all forms of corruption damage the
integrity of construction projects, cause cost increases,
compromise the safety of construction objects, and
lead to a loss of public trust.
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