Causes of Business-to-Government Corruption in the Tendering Process in China

Abstract

Business-to-government (B2G) corruption is thought to be a common phenomenon in the Chinese construction sector, especially in public construction projects, inducing many accidents and losses. As a precursor to its reduction, or elimination, this paper examines the reasons for B2G corruption by identifying the causes and their relative influence in the tendering process. To do this, a total of 24 causes were first identified through literature review and through the results of semistructured interviews with nine top construction enterprise managers in China’s construction market. An opinion questionnaire survey was used further to rank and analyze the causes. A factor analysis also was used to reveal six major underlying causal dimension of B2G corruption, comprising: (1) flawed regulation systems, (2) negative encouragement, (3) lack of professional ethics and codes of conduct, (4) illegitimate gains, (5) lack of competitive and equitable bidding practices and procedures, and (6) the influence of guanxi. Concluding remarks include the study’s potential contribution to practice and regulations in the fight against corruption in the Chinese construction industry.