Analysing the causes of corruption in the Malaysian construction industry

Purpose: Corruption continues to be a pervasive stain on the construction industry in developing countries worldwide, jeopardising project performance and with wide-ranging negative implications for all facets of society. As such, this study aims to identify and analyse the causes of corruption in the construction sector of an emerging economy such as Malaysia, as it is crucial to uncover the specific facilitating factors involved to devise effective counter strategies. 

Design/methodology/approach: Following a detailed literature review, 18 causes of corruption are identified. The results of an opinion survey within the Malaysian construction industry are further reported to rank and analyse the causes. The factor analysis technique is then applied to uncover the principal factors involved. 

Findings: The results indicate that all the considered causes are perceived to be significant, with the most critical causes being avarice, relationships between parties, lack of ethical standards, an intense competitive nature and the involvement of a large amount of money. A factor analysis reveals four major causal dimensions of these causes, comprising the unique nature of the construction industry and the extensive competition involved; unscrupulous leadership, culture and corruption perception; a flawed legal system and lack of accountability; and ineffective enforcement and an inefficient official bureaucracy. 

Research limitations/implications: The study presents the Malaysian construction industry’s view of the causes of corruption. Therefore, the arguments made in the study are influenced by the social, economic and cultural settings of Malaysia, which may limit generalisation of the findings. Practical implications: This paper helps stakeholders understand the root causes and underlying dimensions of corruption in the construction industry, especially in Malaysia. Recommendations for changing cultures that may be conducive to corrupt practices, and anti-corruption measures, are suggested based on the findings of the research. 

Originality/value: These findings can guide practitioners and researchers in addressing the impediments that give rise to the vulnerability of the construction industry to corrupt practices and understanding the “red flags” in project delivery.