Prevalence, Impacts, and Strategies for Mitigation
FEATURED PAPER
By Yamanta Niroula
Kathmandu, Nepal
Abstract
The construction industry plays an important role in economic progress by delivering essential infrastructure and creating employment opportunities. However, despite its critical role, the sector frequently encounters ethical challenges, such as bribery and fraud, which can result in increased project costs and operational inefficiencies. These challenges are especially prevalent in developing countries, where regulatory gaps and weak enforcement mechanisms create an environment conducive to unethical practices. The cumulative effect of such misconduct jeopardizes the financial credibility of projects and diminishes the industry’s appeal to investors and stakeholders.
Addressing these ethical challenges requires a coordinated approach that combines policy reform, institutional accountability, and cultural change. Enhanced procurement oversight, clear compliance protocols, and independent audits help minimize opportunities for unethical behavior. Simultaneously, integrating ethics into professional practices and decision-making is crucial for fostering a culture based on accountability and fairness. Emerging technologies such as blockchain and digital procurement platforms provide tools for enhancing transparency, securing records, and limiting opportunities for manipulation.
Prioritizing ethical governance and technological innovation enables the construction industry to operate more efficiently, compete fairly, and contribute more effectively to sustainable economic development. These measures not only safeguard public resources but also help rebuild trust among stakeholders, reinforcing the industry’s capacity to deliver value in both economic and social terms.
Keywords: Construction, Corruption, Bribery, Fraud, Collusion, Procurement, Bidding, Ethics, Governance, Transparency, Compliance, Oversight, Accountability, Leadership, Regulation, Integrity, Whistleblowing, Blockchain, Sustainability, Trust
- Introduction
The global construction market is currently valued at around $17 trillion and is expected to have significant growth in the coming years. Projections indicate that global construction output will reach $17.5 trillion by 2030, with the sector accounting for 14.7% of the world’s GDP (Betts, et al., 2015). Despite these optimistic forecasts, the industry is plagued by unethical practices, mismanagement and inefficiency.
The construction industry is consistently ranked as one of the most fraudulent sectors globally. According to Transparency International’s Global Corruption Report, corruption within the construction industry has the power not only to influence economies but also to cause substantial harm. Its vulnerability to fraudulent activities is further exacerbated by the substantial capital investments required for infrastructure and development projects, which create opportunities for unethical practices at every stage, from planning to closure and maintenance. Such practices can lead to projects that are unnecessary, poorly designed, overly complex, overpriced, or delayed, leading to financial losses and reduced public trust.
Corruption and bribery pose a severe threat to the construction industry. A Global Economic Crime Survey indicates that one-third of 184 surveyed construction companies across 44 countries reported experiencing economic crime. Further studies have highlighted the prevalence of unethical practices, especially in the bidding process, where collusive tendering, bid rigging, and fraudulent submissions undermine competitive integrity, escalate project costs, and reduce quality (Mason, 2009). In developing countries, there is a widespread public perception associating construction contractors with unethical behavior, indicating systemic issues that necessitate immediate reform. These challenges obstruct ethical professionals from competing fairly and achieving recognition (Mirsky & Schaufelberger, 2015).
This paper explores the widespread occurrence of unethical practices in the construction industry, outlines common types of unethical practices, investigates the contributing factors, evaluates the consequences for projects, stakeholders, and the wider economy, and discusses the strategies for mitigation.
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How to cite this paper: Niroula, Y. R. (2025). Unethical Practices in Construction Industry: Prevalence, Impacts, and Strategies for Mitigation; PM World Journal, Vol. XIV, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2025/07/pmwj154-Jul2025-Niroula-Unethical-Practices-in-Construction.pdf
About the Author
Yamanta Raj Niroula, PMP
Kathmandu, Nipal
Yamanta Raj Niroula is a seasoned Project Management Professional with over 17 years of extensive experience in engineering, infrastructure development, and project management across diverse global environments. His expertise includes project planning, procurement, contract management, stakeholder coordination, and risk mitigation, with a strong focus on executing projects in remote and developing regions under complex operational conditions.
Yamanta holds a Bachelor of Engineering in Civil Engineering and a Master of Arts in Rural Development, along with a Diploma in Civil Engineering. He is a certified Project Management Professional (PMP®) and an active member of the Project Management Institute (PMI) since 2010.
Yamanta has extensive experience in project management, successfully overseeing all stages of construction projects from initial planning to final evaluation. He specializes in managing complex processes, including procurement, contracting, and execution, while maintaining efficiency and regulatory compliance. By staying updated on industry standards and advancements, he has ensured that projects are forward-thinking, sustainable, and adaptable to changing environments.
Yamanta has successfully managed large-scale infrastructure projects, including roads, electrical infrastructure, wastewater treatment plants, logistics facilities, and disaster recovery programs. He has served in various capacities as Project Controls Specialist, Design Manager, Planning Manager, Engineer and Project Manager across international organizations and UN agencies in Nepal, the Maldives, Singapore, Afghanistan, the Philippines, Nigeria, Yemen, Sudan, and Ethiopia.
Yamanta lives in Kathmandu, Nepal and can be contacted at niroulayr@gmail.com.
View his full correspondent profile at https://pmworldlibrary.net/yamanta-raj-niroula/.
To view other works by Yamanta Raj Niroula, visit his author showcase at https://pmworldlibrary.net/authors/yamanta-raj-niroula/
