Co-operation an competition in the construction industry of the Netherlands

In 2002, a Parliamentary Enquiry Committee exposed widespread collusion practices in the Dutch construction industry. The construction industry in the Netherlands is in turmoil and is seen as not living up to the standards that society requires. There seems to be a culture and an environment that induces and sustains economic offences and malpractices. Furthermore, performance and progress are not keeping pace with other industries. The Parliamentary Enquiry Committee recommended a rethinking construction type of reform initiative. In several countries around the globe, there are ongoing efforts to reform construction. International evidence, as presented at the "revaluing construction" confe rence in February 2003 in Manchester (CIB/UMIST), shows a trend towards more co-operative relationships and integrated procurement. Pivotal in all reform initiatives are changes in the approach towards public sector procurementi, with public clients acting as leading clients in the reform. The aim of the project presented in this paper is to study construction industry reform from the theoretical perspective of industrial organisation economics and market dynamics theory. The project connects the construction industry (reform initiatives) with the emerging theoretical insights on dynamic competition. The construction industry might be a good example to test the newly emerging insights in the field of industrial economics. A better understanding of the business systems and market structures, and of lessons learnt abroad, may substantially improve the chances of successful reform of this troublesome industry.