Corruption in the Malaysian construction industry: investigating effects, causes, and preventive measures

Abstract

Corruption has long plagued the construction industry, more so in the developing world. Given its impact, empirical evidence is needed to gain a deeper insight into the phenomenon. This paper examines the influence of corruption on project outcomes, explores the causes of corruption, and evaluates anti-corruption measures. Drawing on an empirical survey in Malaysia, the significance of the causes and preventive measures are prioritized. The findings suggest that negative encouragement is more likely to induce corruption, followed by the nature of the construction industry, and flawed regulatory systems. As for the preventive measures, enforcement of law, regulations, and sanctions, high integrity and honest construction culture, and effective reporting channel rank the highest. Finally, correlational analysis reveals audit mechanism and code of conduct as the most significant cause-driven preventive measures. The paper sheds new light on the salient issues of construction corruption and recommends feasible measures for its reduction.