This paper shows that there is an opportunity to use an institutional economics approach to the analysis of the challenges around megaproject construction contract development. It shows, firstly, that this approach is useful to analyze the reasonability of using particular contractual functions and clauses to deal with megaproject complexity. Specifically, although it is here recognized that complexity justifies the use of coordination and adaptation clauses, it is also alleged that safeguarding clauses may or may not be useful as complexity rises because this depends on the relationship between maladaptation costs and transaction costs, both related to the institutional environment. Secondly, this paper also alleges that new institutional economics is a helpful framework to analyze the prioritization of the underlying factors that determine the criteria used to assess and select contracting methods.This document illustrates that the decision of the procuring method needs to be fundamentally addressed by analyzing the sponsors’ characteristics and objectives. This is aligned with the fact that the decision regarding which contracting method to apply should consider the potential minimization of transaction costs, by adjusting governance to the nature of the transaction.

CONSTRUCTION MICROECONOMICS Unique and comprehensive reference describing microeconomic approaches, theories, and models adapted to and developed for the construction industry Construction Microeconomics provides comprehensive coverage of microeconomics applied to the construction industry, focusing on construction clients, who initiate construction projects, and on contractors who transform the ideas and plans of clients into infrastructure and buildings. With the help of microeconomic theory, it tries to answer questions about decision-making by clients, contractors, and governments with respect to projects in the built environment. It includes discussions of alternative theories to mainstream microeconomics, such as new institutional economics, behavioral economics, and the capability approach. Applications from the construction sector including land supply, sustainability, industrialization, and lean construction are provided to ground the theory in practical construction. In Construction Microeconomics, readers will learn: How microeconomic theory relies heavily on assumptions for modeling and the nuances of adjusting those assumptions How heterogenous contract goods affect supply and demand, markets, information, technology, and accordingly, the theories of contractors and owners How interaction influences the production process and how land as a production factor changes the production function How ex-ante costs determine the cost theory of the contractor and why contracting is more akin to the service sector than the goods sector Advanced undergraduate and masters students, lecturers and academics in construction and related disciplines, and professionals in the construction industry looking for expert analysis into a unique facet of the field will find Construction Microeconomics to be a valuable, complete, and authoritative reference on the subject.

It will be useful for those experienced and senior professionals who are charged with authorizing and controlling projects. Recommended. P.F. Rad, Choice Building on the seminal work of Bent Flyvbjerg, this book is a collection of expert contributions that will prove essential to anyone wanting to understand why mega-projects go wrong and how they can be made to work better. Professor Sir Peter Hall, University College London, UK This book offers a refreshing and fascinating look at mega-projects from the perspective of public evaluation and planning. With the changing role of the public sector in planning and implementing large-scale projects and a subsequent strong emergence of private public modes of operation, mega-projects have become a problematic phenomenon. This volume is a major source of information and reference. It provides the reader with unique insights and caveats in mega-projects planning. Peter Nijkamp, VU University Amsterdam, The Netherlands This book enlarges the understanding of decision-making on mega-projects and suggest recommendations for a more effective, efficient and democratic approach. Authors from different scientific disciplines address various aspects of the decision-making process, such as management characteristics and cost benefit analysis, planning and innovation and competition and institutions. The subject matter is highly diverse, but certain questions remain at the forefront. For example, how do we deal with protracted preparation processes, how do we tackle risks and uncertainties, and how can we best divide the risks and responsibilities among the private and public players throughout the different phases of the project? Presenting a state-of-the-art overview, based on experiences and visions of authors from Europe and North America, this unique book will be of interest to practitioners of large-scale project management, politicians, public officials and private organisations involved in mega-project decision-making. It will also appeal to researchers, consultants and students dealing with substantial engineering projects, complex systems, project management and transport infrastructure.

This innovative Handbook aims to look at the logic, various dimensions, and implications of collaboration in construction. It opens with a conceptualization of collaboration and its accompanying terms (i.e., cooperation and coordination) and continues with chapters in Part I which discuss the theoretical grounds of collaboration between individuals and organizations from the viewpoints of an impressive variety of relevant disciplines including organizational science; anthropology; law; economics; design; and production. This is followed by discussions of the essence and value of collaboration in construction in Part II through explaining the role of collaborative project delivery methods and their benefits in advancing collaboration, describing the competency profile of project managers for collaborative construction, explaining key drivers and barriers of collaboration in construction, and explaining practices as well as challenges of measuring collaboration in construction. Then, in Part III, case projects are employed to explain the benefits of collaboration in different levels of team, project, and business, to discuss the role and impact of collaboration on site and bridging the divide between construction and facility management, to discuss the role of digitalization in facilitating and advancing collaboration, to explain collaboration in decision making, to present examples of collaborative visual management, and to outline the implications of stakeholders' early involvement and collaboration for project success. Finally, consideration is given to the future of collaboration in construction to conclude the book. This Handbook is key reading for a broad ranging audience within the fields of construction, project, infrastructure and engineering management, organisational science, economics, and business management.

Construction Economics provides students with the principles underlying the relationship between economic theory and the construction industry. Its new approach specifically examines the problems of securing sustainable construction and this fifth edition broadens the message to address the immediacy of the problems relating to the carbon-based world that we have constructed. Embracing the whole process of the construction life cycle, the new edition discusses the economic impact of the Covid pandemic on the industry and the broader implications of the promise to build back better. It also includes new coverage of the opportunities offered by technology, the establishment of higher standards to achieve greater energy efficiency and wellbeing, the adoption of the principles of a circular economy, the retrofit of existing buildings and the recycling of materials. New sections also highlight the methodology of the subject to identify the boundaries of construction economics and clarify what to expect and what can be achieved. As with previous editions, it retains a tried and tested format including: a clear and user-friendly style use of colour for emphasis regular summaries of key points a glossary of key terms extensive use of tables, figures and data readings from Construction Management and Economics tutorial questions to review each section research guidance reviews of useful websites. This invaluable textbook is essential reading across a wide range of disciplines. It provides the economic context to the relevance of sustainability and debates about climate change, highlighting the vital contributions that surveyors, contractors, project managers, engineers, architects and developers can offer to take it forward.

Traditional building economics has primarily been concerned with issues around project appraisal and cost management techniques. On the other hand, modern construction economics has a wider focus with stronger links to mainstream economics, reflecting an increased interest in a range of theoretical issues in construction economics, both at the macro and micro level. In Modern Construction Economics: Theory and Application, a variety of approaches are used to present a coherent vision of synthesis between industry economics and project economics. Topics covered include: developing construction economics as idustry economics competition and barriers to entry in construction innovation in construction theory testing in construction management research collusion and corruption in the construction sector. Including contributions from academics in the UK, Sweden, Hong Kong, and Australia, this is a truly global review of a core issue for the construction industry worldwide. The result is a unique book that will push toward the development of a comprehensive theoretical framework of construction economics. This is a must-read for all serious students of construction economics, and all practitioners looking for a deeper understanding of their industry.

This is a self-contained text on the logic and institutions of project finance, supplemented by a series of project finance case studies illustrating applications in different economic environments, across different jurisdictions and at different stages of development. It will introduce an analytical framework drawing on applied institutional economics that includes and concentrates primarily on an analysis of the institutional logic behind generic project finance arrangements. The application of the institutional framework will be demonstrated with project cases from Hong Kong, Thailand, India, Europe and Azerbaijan – each at different stages of development. While each project case will have a general theme and will highlight aspects of interest to built environment professionals, it will primarily be used to illustrate one or more specific PF/PFI principle.