The effect of competition and regulation on quality of construction projects: a case of contractors in Tanzania

Abstract

Real competitive advantage in the construction industry is attained when firms carry out their operations beyond their national borders. Due to political pressure and in a genuine effort to empower their citizens,many developing countries have implemented measures that ensure that citizen consultants/ contractors are given preference when bidding for jobs. In other words, deliberate barriers are placed against entry of foreign firms. Unfortunately, under the normal situation of global open market, it is difficult to deprive this opportunity to foreign firms especially when a big portion of the budget spent on construction is funded by donors. It is also expected that the functions of regulatory bodies is among others, to improve quality standards of construction projects. In the context of the construction industry, it is also believed that competition helps improve the quality of projects. However, all these beliefs have hitherto never tasted empirically. This study aimed at empirically testing the effect of competition and regulation on the quality of construction projects. A questionnaire method was employed involving various stakeholders in the construction industry. Chi square tests were used to establish the effect of competition and regulation on the quality of projects. The study has established that competition has considerable effect on the quality of construction projects. And quite strange, the study has revealed that regulation has no effect on quality of construction projects.