Journal of Business Ethics (2024) 195:335–352

[Link]

ORIGINAL PAPER

The Labyrinth of Corruption in the Construction Industry: A System

Dynamics Model Based on 40 Years of Research
Seyed Ashkan Zarghami1

Received: 2 September 2023 / Accepted: 6 February 2024 / Published online: 17 March 2024
© The Author(s) 2024

Abstract
The academic literature has viewed drivers of corruption in isolation and, consequently, failed to examine their synergistic
effect. Such an isolated view provides incomplete information, leads to a misleading conclusion, and causes great difficulty
in curbing corruption. This paper conducts a systematic literature review to identify the drivers of corruption in the construc-
tion industry. Subsequently, it develops a system dynamics (SD) model by conceptualizing corruption as a complex system
of interacting drivers. Building on stakeholder and open systems theories, the proposed SD model shows how the complex
reinforcing relationship between authoritative, organizational, cultural, and financial drivers of corruption further increases
corrupt practices. The new model also provides lessons that can be helpful in the development of policy frameworks to con-
trol corruption in the construction industry. To achieve success in the fight against corruption, the findings of this research
suggest that (1) corruption must be understood at both the organizational and state levels, (2) anticorruption practices must
be informed by ethically grounded stakeholder management strategies, and (3) anticorruption reforms must go hand-in-hand
with strategies to tackle the economic downturn.

Keywords Construction industry · Corruption · Open systems theory · Stakeholder theory · Systematic literature review ·
System dynamics

Introduction is concerned with corrupt behavior and the drivers of corrupt

practices (Orudzheva et al., 2020).
Unethical behavior on the part of business corporations has Business ethics literature has provided useful insights
raised great concern among scholars and business executives regarding the drivers of corruption and impacts on business
(Jannat et al., 2022; Rees et al., 2022). As a result, the litany and society. Examples of common drivers include societal
of firms engaged in unethical practices has become the the- inequality (Hudson et al., 2022), organizational drivers (Yap
matic preoccupation of business ethics literature (Antunez et al., 2022), cultural factors (Hu et al., 2023), and political
et al., 2023; Zaal et al., 2019). Corruption is recognized as causes of corruption (Khieu et al., 2023). In addition, prior
the most dominant unethical practice of firms, their lead- studies have explored how various internal and external fac-
ers, and their employees. Corruption breeds inequality and tors may trigger corrupt conduct (Ren et al., 2022). Exam-
imposes extra costs on firms and societies (Everett et al., ples include psychological antecedents of corrupt behavior
2006; Hauser, 2019), and, in recent years, many govern- (Hauser, 2019), firm formality (Vu et al., 2023), and con-
ments, organizations, religious groups, scholars, and civil tractors’ motivation for rule violation in projects (Liu et al.,
societies in both developed and developing countries have 2023).
been actively involved in studying and fighting it (Snyman, Despite paying considerable attention to the drivers of
2022). Specifically, much of the research on business ethics corruption, the literature has not taken a holistic approach
and, consequently, has failed to address the broader problem
of relationships between these drivers. This reminds us of
* Seyed Ashkan Zarghami
[Link]@[Link] the parable of The Blind Men and the Elephant, where the
blind men describe the elephant by touching only one part
1
Research School of Management, College of Business of the elephant’s body and, accordingly, draw a mislead-
and Economics, The Australian National University, 26 ing conclusion about its appearance (Tomoaia-Cotisel et al.,
Kingsley St., Acton, Canberra, ACT​2601, Australia

Vol.:(0123456789)
336 S. A. Zarghami

2022). In a comparable way, an isolated view of the causal intervention. It then illustrates how this model can be used
drivers of corruption—without considering their role in the by managers and policy makers to curb corruption, before
broader context of organizational, cultural, financial, and briefly discussing how it could be improved by addressing
authoritative systems—results in a partial understanding of its limitations.
this concept.
Against this backdrop, this paper takes a systems think-
ing approach to understand the causal structure of corrup- Research on Corruption in the Construction
tion as a complex phenomenon. The construction industry, Industry: Where Do We Stand?
as one of the most corrupt industries worldwide (Monteiro
et al., 2022), is chosen for this research. Accordingly, this Literature Review Methodology
paper adopts a system dynamics (SD) modeling technique
to develop a conceptual model that illustrates how the inter- To synthesize prior research in a transparent way, this paper
actions between corruption drivers lead to multiple vicious employed an eight-step systematic literature review (SLR)
cycles that reinforce corrupt practices in the construction approach proposed by Okoli (2015). Figure 1 depicts the
industry. The proposed SD model provides a means of elabo- steps taken to conduct this SLR. As can be seen, these can
rating two theories, open systems theory and stakeholder be classified into four stages: planning, selection, extraction,
theory, which provide a framework to interpret patterns of and execution.
interaction among corruption drivers (Whetten, 1989). Open
systems theory provides a theoretical foundation to explain
why organizations cannot be demarcated from their exter-
nal environment in their efforts to control corruption, while
stakeholder theory enables us to create a link between ethics
and organizational strategies to curb corruption (Harrison &
Wicks, 2013).
This research responds to the call for studies that examine
the causes of corruption and the ways corrupt practices affect
organizations and their stakeholders (Dacin et al., 2022). As
a result, it contributes to the literature on business ethics in
three ways. First, it departs from earlier studies on corrup-
tion by taking into account feedback processes. Available
studies mainly adopt an open-loop view, in which the ripple
effect phenomenon is ignored. This paper is among the few
that illustrate how ripple effects, propagating throughout
feedback loops, promote corruption. This approach diverts
our attention to the causes underlying an increasing trend
toward corrupt practices. Second, the proposed SD model
identifies three subsystems that promote corruption in the
construction industry and, accordingly, provides decisional
guidance for designing policies to prevent corruption. This
is achieved by developing three propositions to counter the
vicious cycles that reinforce corruption in the construction
industry. Third, this research is the first to undertake network
analysis to locate the high-leverage points in the network of
interacting drivers of corruption. This enables policy makers
and managers to design high-leverage policies for curbing
corruption in the construction industry.
The remainder of the paper is structured as follows. Next,
it presents a structured review of the literature on corrup-
tion in the construction industry. It then provides a detailed
discussion of how the proposed SD model was developed,
followed by analysis of the three subsystems of the model.
The paper offers an exemplary application of the pro-
posed SD model to identify high-leverage points for policy Fig. 1  Steps for conducting the systematic literature review
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 337

Planning were selected, of which six were not accessible. The review-
ers read the 122 remaining papers in their entirety to ensure
The first step in the planning stage defines the purpose of substantive relevance. These papers were further narrowed
the SLR and justifies its suitability. The main objective of down to 56 substantively relevant papers. The backward-
conducting an SLR here is to explore and identify the drivers tracking technique was used by reviewing the references of
of corruption in the construction industry. Contrary to other the selected 56 papers to find potential papers that could be
types of literature review, an SLR provides as comprehen- relevant, bringing the total journal articles under analysis
sive as possible an overview of what is already known about to 62.
corruption in the construction industry. In the second step of
the planning stage, a protocol, the detailed procedural steps Extraction
to conduct the SLR, was developed and the reviewers were
trained. The protocol also describes the electronic databases Two reviewers independently performed data extraction
to be searched and the different screening criteria that papers (Step 5). The extracted data were compared and resolu-
have to pass for inclusion in the review. tion sessions were held to resolve disagreements and reach
consensus on key drivers of corruption in the construction
Selection industry. To examine the quality of the selected papers (Step
6), 18 appraisal questions, presented in Petticrew and Rob-
In Step 3, the criteria and keywords for the practical screen- erts (2006), were used. Accordingly, two reviewers evaluated
ing were decided. Reviewers also defined the inclusion and the quality of the papers and decided to remove five, leaving
exclusion criteria for selecting and excluding papers. For 57 final papers as the basis for developing the proposed SD
instance, reviewers decided to restrict their review to peer- model. The final selected papers are reported in Table 1.
reviewed journals to ensure high quality, thereby exclud-
ing conference papers, book chapters, and doctoral theses. Execution
In addition, papers written in languages other than English
were excluded due to a lack of translation resources. Moreo- To present a reflective interpretation of the findings of the
ver, the search was not restricted to specific cases of con- SLR, a synthesis of reviewed papers was performed in the
struction projects. Since the literature uses a proliferation execution stage (Step 7). To synthesize data, the reviewers
of terms to describe “corruption” and “construction pro- followed the three-step coding approach proposed by Gioia
jects,” reviewers agreed on keywords to search the litera- et al. (2013), including (1) developing the first-order codes,
ture as widely as possible. For example, multiple relevant (2) identifying the second-order themes, and (3) deter-
synonyms for “corruption” were derived to add to the search mining the aggregated dimensions. The first-order codes
strategy, including “bribery,” “fraud,” “collusion,” “embez- were developed by taking into account a full description
zlement,” “bid-rigging,” “overbilling,” “price-fixing,” and of causal drivers contributing to corruption based on the
“kickbacks.” Similarly, the term “construction industry” was original wording. To develop the second-order themes, the
presented in different ways such as “construction sector” reviewers identified similarities and differences among first-
and “construction projects.” The literature search was car- order codes. Finally, the second-order themes were narrowed
ried out based on the developed protocol and the identified down into aggregated dimensions, which were not evident
key terms. The reviewers used two well-known electronic in the reviewed papers. Table 2 is then constructed to report
databases: Scopus and Business Source Complete (EBSCO). the second-order themes and the aggregated dimensions. In
To achieve more specific outcomes, the Boolean connec- a final move, the steps of the SLR including the outputs of
tors “AND” and “OR” were used to combine the identified each step were documented in Step 8.
keywords.
As expected, searching Scopus and EBSCO generated
duplicate citations. Thus, reviewers searched the selected A System Dynamics Model of Corruption
papers for duplicates and deduplicated references manually,
as recorded on a Microsoft Excel spreadsheet. This resulted An Overview of System Dynamics Modeling
in 354 peer-reviewed papers that address corruption in vari-
ous types of construction projects including commercial, A complex system is defined as “a set of elements stand-
residential, industrial, and mixed-used. Two reviewers ing in interrelation among themselves and with the environ-
independently examined the abstracts of these deduplicated ment” (von Bertalanffy, 1972, p. 417). A complex system
papers to eliminate clearly irrelevant papers. In perform- cannot be understood by examining its individual elements;
ing this step, reviewers agreed to remove 226 papers, which rather, it “can only be understood in its entirety” (Harri-
were substantially irrelevant. As a result, 128 references son, 2020, p. 24). In the real world, quite often, a complex
338 S. A. Zarghami

Table 1  Final selected papers

Code Paper Code Paper Code Paper

A1 Ullal (2023) A20 Ebekozien (2020) A39 Tabish and Jha (2011)
A2 Oluseye et al. (2023) A21 Aduwo et al. (2020) A40 Ameh and Odusami (2010)
A3 Soni and Smallwood (2023) A22 Hosseini et al. (2020) A41 de Jong et al. (2009)
A4 Devine et al. (2022) A23 Apriyanti and Rais (2020) A42 Kenny (2009)
A5 Z. Wang et al. (2022) A24 Hilmi et al. (2019) A43 Anekwe (1987)
A6 Amoah and Steyn (2022) A25 Owusu et al. (2019) A44 Damit (1983)
A7 Bhagat and Jha (2022) A26 Tabish and Jha (2018) A45 Chilakamarri (2023)
A8 Ebekozein et al. (2022) A27 Luzgina (2017) A46 Signor et al. (2022)
A9 Martin et al. (2023) A28 Shan et al. (2017) A47 Liu et al. (2023)
A10 Hu et al. (2023) A29 Ameyaw et al. (2017) A48 Owusu et al. (2020)
A11 Monteiro et al. (2022) A30 Courtois and Gendron (2017) A49 Yu et al. (2019)
A12 Yap et al. (2022) A31 Kyriacou et al. (2015) A50 Saim et al. (2019)
A13 Alani and Mahjoob (2021) A32 Brown and Loosemore (2015) A51 Chan and Owusu (2017)
A14 Cheng and Darsa (2021) A33 Bowen et al. (2015) A52 Zhang et al. (2017)
A15 Zhai et al. (2021) A34 Deng et al. (2014) A53 Doroftei (2016)
A16 Santa-Cruz et al. (2021) A35 Gunduz and Önder (2013) A54 Arewa and Farrell (2015)
A17 Sikombe and Phiri (2021) A36 Mukumbwa and Muya (2013) A55 Le et al. (2014)
A18 Yap et al. (2020) A37 Bowen et al. (2012) A56 Alutu and Udhawuve (2009)
A19 R. Wang et al. (2020) A38 Abdul-Rahman et al. (2011) A57 Bowen et al. (2007)

system of interacting elements creates a persistent problem. relationships between drivers. To expand the boundaries of
Addressing such a problem requires a modeling technique our mental models, an SD model of corruption is developed
that takes account of the complex cause-and-effect rela- in the remainder of this paper. This, in turn, enables answer-
tionships among elements that have created the problem ing the second research question, “How do the drivers of
(Zarghami, 2023). However, we cannot intuit such complex corruption in the construction industry interact?”.
relationships because of our cognitive limitations (Haque
et al., 2023). SD, developed by Jay W. Forrester, is a mod- Modeling Process
eling technique that can be used to examine such cause-and-
effect relationships (Zarghami & Dumrak, 2021). A causal To process information obtained from the SLR and con-
loop diagram (CLD) is a diagramming tool used to visualize struct an SD model of interacting drivers of corruption, this
SD models by portraying the causal relationships between paper adopts the empirical-oriented group model building
elements of a complex system. Causal links, with either (GMB) technique proposed by Vennix (1996). In this con-
positive or negative polarity, are used to show causality text, a group of three experts with expertise in the field of
between elements. A positive polarity indicates that cause corruption was selected using purposeful sampling (Patton,
and effect move in the same direction, whereas a negative 2015). Criterion sampling, a purposeful sampling strategy,
polarity implies that cause and effect change in the opposite was used to select experts that meet either, or both, of the
direction. Two or more causal links create a feedback loop. following two criteria: (1) conducted research in the context
Feedback loops can be classified into two primary types: of corruption over the past 5 years and (2) engaged in a
reinforcing and balancing (Zarghami, 2023). In a reinforcing range of anticorruption and integrity forums.
feedback loop, an initial increase (decrease) in any element
of the loop ripples through the loop and ultimately returns Pre‑workshop Preparation
to the element, resulting in an increase (decrease) in the ele-
ment. Conversely, a balancing feedback loop creates stability The first step included deciding the model’s purpose. Schol-
by resisting further changes in any element of the loop. ars and practitioners in the field of business ethics, as well
As discussed, corruption is a complex social, economic, as managers and policy makers involved in the construc-
cultural, and political phenomenon. Such complexity dwarfs tion industry, were considered the primary audience of the
our cognitive capabilities to examine the complex cause- model. The basic assumptions of the proposed SD model,
and-effect relationships between the drivers of corruption including its boundary, were then identified. The boundary
because of the inability of our mental models to intuit the of the model was defined based on the following question:
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 339

Table 2  An overview of drivers of corruption in the construction industry

Second-order Themes Aggregate Dimensions References

Weak governance Organizational A42

Short-term strategic goals Organizational A5
A lack of expertise Organizational A1, A12, A14, A37
Participation of non-professionals Organizational A36, A41, A43
A shortened investment horizon Organizational A1
Information asymmetry Organizational A4, A25, A27, A28, A47
The absence of contract/tendering monitoring systems Organizational A24, A39, A46
Abundance of procedural requirements in procurement Organizational A7
Procurement irregularities Organizational A25, A26, A36
Over-competition in tendering process Organizational A5, A6, A25, A28, A35, A36, A38, A50, A55, A57
A lack of competitive bidding process-Unfair bidding Organizational A41, A51, A53
processes
A lack of transparency Organizational A12, A17, A21, A24, A25, A26, A27, A28, A29, A33,
A35, A39, A50, A51
Concealment of works Organizational A12, A16, A21, A29, A36, A38, A40, A50, A57
Poor documentation Organizational A21, A25, A51
Poor leadership Organizational A12, A18, A32, A55
A lack of an effective financial system Organizational A14
Top management fraud Organizational A19
Project uniqueness and complexity Organizational A4, A6, A7, A12, A15, A16, A23, A25, A31, A35, A36,
A37, A45, A47, A48, A49, A51, A54, A55, A57
Time and budget pressures Organizational A10, A47
Long project duration Organizational A36
Opportunity for time and cost overruns Organizational A36, A57
A large amount of money involved Organizational A12, A23, A36
Design problems Organizational A14, A50
Contradiction between design specifications and bid docu- Organizational A14
ments
Fragmentation of construction processes Organizational A12, A21, A36
The absence of standardized execution for the execution Organizational A25
phase
A lack of rigorous supervision during project execution Organizational A25, A32, A55
Complexity of contractual structure Organizational A25, A27, A37, A54
Defective contracts Organizational A41
A high number of subcontractors and contractual relation- Organizational A6, A23
ships
Diversity of stakeholders and relationships among them Organizational A12, A47
Unethical behavior such as dishonesty and greediness Organizational A2, A6, A12, A20, A21, A36, A50, A56, A57
Conflict of interest Organizational A50, A57
A lack of knowledge about the code of conduct Organizational A6
Work dissatisfaction Organizational A34
Over-close/interpersonal relationships Organizational A11, A25, A27, A35, A41, A45, A55
Job insecurity Organizational A25
The culture of secrecy Cultural A29, A37, A41, A54
Cultural behavior Cultural A10, A31, A38, A45
Culture of deviance Cultural A30
The influence of guanxi Cultural A11, A25, A47, A51, A52
Normative cognition Cultural A10, A13
Negative encouragement Cultural A12, A52
Negative role models Cultural A25
A weak Organizational culture Cultural A10, A45, A54
340 S. A. Zarghami

Table 2  (continued)
Second-order Themes Aggregate Dimensions References

Economic downturn Financial A38, A56

Organizational financial constraints Financial A5
Economic survival Financial A25
Tight margins Financial A35
Low income Financial A20, A21, A25, A34, A36, A55
Insufficient legal frameworks Authoritative A1,A8, A12, A13, A14, A18, A25, A27, A28, A38, A52,
A55
Low-intensity punishment/inadequate sanctions Authoritative A5, A12, A25, A36, A37, A47, A51, A55
Officials’ discretionary power Authoritative A9
Power to influence contract award Authoritative A56
Political interference Authoritative A20, A22, A25, A28, A31, A35, A36, A50, A53, A56
A lack of accountability Authoritative A14, A18, A24, A29, A39
A lack of coordination among government departments Authoritative A25, A32
A low level of democracy Authoritative A31
A lack of stakeholders’ involvement Authoritative A13
Ambiguous ethical standards Authoritative A3, A25, A37, A39, B1, A51, A52, A55
Using anticorruption strategies deceptively Authoritative A11
Bureaucracy of permitting and approval processes-Multi- Authoritative A4, A6, A12, A16, A18, A25, A27, A32, A36, A55, A57
farious licenses and permits
Complexity of rules Authoritative A25, A28
Dominance of a few large players Authoritative A43, A49
Monopoly of suppliers/contractors Authoritative A25, A29, A35, A44
Forming cartels Authoritative A44
The absence of a system that detects collusive practices Authoritative A25, A33, A46
Insufficient ethics training Authoritative A38

“How do the drivers of corruption in the construction indus- workshops, in which three experts participated. A deduc-
try interact?” This indicates that the proposed model should tive reasoning approach, as suggested by Cavana and
provide an endogenous explanation of corruption to illus- Mares (2004), was employed to construct causal links
trate how corruption drivers can affect and be affected by between corruption drivers and to ensure the validity of
one another. Thus, exogenous variables, which are not con- expert judgment. To explain in greater detail, consider the
trolled by feedback loops in the model, were excluded (Ster- following:
man, 2000); for example, bureaucratic quality was excluded
because it is not affected by other corruption drivers in the Premise X: A collusive detective system results in the deceptive use
model. The list of causal factors of corruption, derived from of anticorruption strategies
the SLR, was e-mailed to experts. To ensure that any key Premise Y: The absence of ethics training leads to the deceptive use
of anticorruption strategies
causal factor was not missing, experts were asked, “Do we
If X and Y, then Z: If the detective system is collusive and ethics
need to adjust or add causal drivers?” Experts confirmed training is not provided, then the deceptive use of anticorruption
that the list of causal drivers covered the main drivers of strategies is likely
corruption in the construction industry. An online meeting
was then conducted via the Zoom platform, during which The following sub-argument can be constructed from
the aim of the workshops was discussed. In addition, experts these three premises:
were introduced to the concept of systems mapping in SD,
followed by a brief discussion of various modeling steps. X
Y
Exploratory Workshops If X and Y, then Z
Therefore Z
To solicit experts’ perception of the relationship between
causal factors of corruption, two exploratory GMB work- The conclusion of this argument is as follows:
shops were carried out. The author chaired the two-hour
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 341

Premise Z: The deceptive use of anticorruption strategies results Anatomy of Corruption in the Construction
from a collusive detective system and the absence of ethics train- Industry: Propositions Development
ing

To check the validity of the causal relationships, a In the proposed SD model (shown in Fig. 3), three subsys-
counterfactual analysis was performed. In this vein, the tems connect authoritative, organizational, cultural, and
experts were asked whether an ineffective collusion detect- financial drivers of corruption. These subsystems include
ing system decreases the deceptive use of anticorruption 25 reinforcing feedback loops that create vicious cycles
strategies and they indicated this was not the case. In a leading to further increases in the level of corruption.
related vein, the experts were asked whether the absence
of ethics training prevents the deceptive use of anticorrup-
tion strategies and they indicated that the statement was Subsystem 1: The Interface Between Authoritative
not likely. In other words, the causal relationship between and Organizational Drivers
X and Z, as well as between Y and Z, passed the counter-
factual test. It is now possible to present premises X, Y, The CLDs for this subsystem are provided in Fig. 4. This
and Z in a diagrammatic form as in Fig. 2. subsystem focuses on the state in which corruption occurs
Following this deductive reasoning approach, the causal and, accordingly, describes the interface between authori-
relationships among corruption drivers were established. tative and organizational drivers of corruption. Table 3
The diagrammatic presentations of these relationships presents the causal drivers of corruption in this subsystem.
were linked together to construct the CLD of corruption Feedback loops R1–R4 examine the interactions among
drivers. authoritative drivers and describe how corruption can be
entrenched in undemocratic states. Feedback loop R1
explains that government officials resist accountability in
A Confirmatory Workshop undemocratic states, leading to a high degree of discretion
in exercising power (Pertiwi & Ainsworth, 2021). This,
An online two-hour confirmatory workshop was carried in turn, leads to improper political interference, thereby
out during which experts were asked to review specific imposing pressure to influence contracts. The conse-
feedback loops in turn. The feedback loops constructed in quent outcome of such interference is the dominance of
the exploratory workshops were consolidated using Ven- large players in the construction industry and the subse-
sim PLE 10.0.0. Vensim is a simulation software, devel- quent formation of construction cartels. This results in
oped by Ventana Systems, which provides a platform for the monopoly power of a few contractors, which further
qualitative modeling, as well as quantitative analysis, of increases corrupt public practices. Feedback loops R2, R3,
SD models (Zarghami & Gunawan, 2023). This software and R4 take into account the lack of involvement of the
provides a flexible approach to construct a consolidated public and officials in decision making in undemocratic
SD model of corruption drivers and thus facilitates discus- states. These feedback loops emphasize that government
sion. In the confirmatory workshop, the experts discussed departments/agencies face coordination problems arising
whether they agreed with the consolidated SD model. With from the low level of stakeholder involvement, in turn
some suggested minor modifications, they confirmed the resulting in the establishment of ineffective legal frame-
CLD of corruption drivers shown in Fig. 3. works to eradicate corruption (Adelopo & Rufai, 2020).
Feedback loop R2 shows that an ineffective legal frame-
work is a major impediment to the provision of an effec-
tive sanctioning system, which increases the probability
of corruption.
Moreover, feedback loops R3 and R4 examine the rela-
tionships that exist among the complexity of rules, result-
ing from ineffective legal frameworks, and the deceptive
use of anticorruption strategies. More explicitly, feed-
back loop R3 depicts that an increase in the complexity
of rules hinders the development of effective collusion
detection systems. The absence of a system that can effec-
tively detect corrupt practices in the construction industry
promotes the deceptive use of anticorruption strategies,
thereby failing in the fight against corruption. Feedback
Fig. 2  The diagrammatic form of premises X, Y, and Z
342 S. A. Zarghami

Fig. 3  Causal loop diagrams of corruption drivers in the construction industry

loop R4 captures the direct correlation between the com- may occur as a result of defective contracts. This, in turn,
plexity of rules and the ambiguity of ethical standards. provides the opportunity for time and cost overruns in pro-
Such ambiguity decreases the effectiveness of ethics jects, leading to time and budgetary pressures. Under such
training, reinforcing the deceptive use of anticorruption pressures, construction managers must make fast decisions
strategies. based on limited information, which creates difficulty in
Feedback loops R5, R6, R7, R8, and R9 illustrate five curbing corruption. In a similar vein, the key determinant
cycles in which an increase in the complexity of contracts of feedback loops R6, R7, R8, and R9 is the contractual
propagates through the cycle and returns to increase corrupt complexity of construction projects. Construction projects
practices in the construction industry. These feedback loops consist of interwoven networks of multiple subcontractors
commonly act to reinforce the complexity of construction and suppliers whose behavior is motivated and regulated by
contracts in line with the interactions among authoritative contracts (W. Wang et al., 2018). Contractual complexity
drivers, including stakeholder involvement, coordination adds complexity to the coordination task within such net-
among government units, permits and approvals bureau- works, which in turn increases project complexity. In feed-
cracy, and procurement requirements. In feedback loop back loops R6, R7, R8, and R9, construction complexity
R5, contractual complexity increases mistakes in contract cascades across other organizational drivers and ultimately
documents. Discrepancies between design and contracts amplifies the level of corruption in the construction industry.
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 343

Fig. 4  Causal loop diagrams of Subsystem 1

Subsystem 1 stresses the importance of an open systems practices, such as favoring contractor monopolies (feed-
view of corruption, which suggests that the boundaries back loop R1). The second perspective regards govern-
of an organization are permeable (Harrison, 2019). This ments as part of the external environment for organiza-
indicates that organizations are dependent on their external tions, overseeing corruption through the utilization of
environment in their efforts to control corruption. More stakeholder management practices. From this perspective,
explicitly, corruption as a complex phenomenon can be particularly in democratic states (feedback loops R1–R4),
best described as based on not only organizational driv- governments employ a participatory and people-centric
ers but the interaction between authoritative drivers that approach to actively involve social actors in the planning
emerge from the external environment such as government and implementation stages of policies aimed at combating
entities and officials. In this context, governments can be corruption.
viewed from two perspectives. The first perspective views
governments as part of a broader stakeholder group (Esper Proposition 1 Corruption in the construction industry must
et al., 2023). Viewed from this perspective, governments be understood at both state and organizational levels, and
interact with other stakeholders in various ways—coop- the fight against corruption cannot be successful without
eratively, such as by outlining procurement requirements reform of both states and organizations.
(feedback loops R5–R9), and at times, engaging in corrupt
344 S. A. Zarghami

Table 3  Corruption drivers of feedback loops in Subsystem 1

Loop Corruption factors

R1 Democracy–Accountability–Officials’ discretionary power–Political interference–Power to influence contracts–Dominance of large play-

ers–Forming cartels–Monopoly of contractors
R2 Democracy–Stakeholder involvement–Coordination among government units–Effective legal frameworks–Effective sanctioning systems
R3 Democracy–Stakeholder involvement–Coordination among government units–Effective legal frameworks–Complexity of rules–Collusion
detection systems–Deceptive use of anticorruption strategies
R4 Democracy–Stakeholder involvement–Coordination among government units–Effective legal frameworks–Complexity of rules–Ambigu-
ous ethical standards–Ethics training
R5 Democracy–Stakeholder involvement–Coordination among government units–Permits & approvals bureaucracy–Several procurement
requirements–Complexity of contracts–Defective contracts–Contradicting design & bid documents–Opportunity for time & cost over-
runs–Time & budget pressures
R6 Democracy–Stakeholder involvement–Coordination among government units–Permits & approvals bureaucracy–Several procurement
requirements–Complexity of contracts–Construction complexity–Long project duration–Opportunity for time & cost overruns–Time &
budget pressures
R7 Democracy–Stakeholder involvement–Coordination among government units–Permits & approvals bureaucracy–Several procurement
requirements–Complexity of contracts–Construction complexity–Large amount of money involved–Over-competition–Tight margins–
Opportunity for time & cost overruns–Time & budget pressures
R8 Democracy–Stakeholder involvement–Coordination among government units–Permits & approvals bureaucracy–Several procurement
requirements-Complexity of contracts––Construction complexity–Fragmentation of construction processes–Diversity of stakeholders–
High number of subcontractors–Over-competition–Tight margins–Opportunity for time & cost overruns–Time & budget pressures
R9 Democracy–Stakeholder involvement–Coordination among government units––Permits & approvals bureaucracy–Several procurement
requirements–Complexity of contracts–Construction complexity–Fragmentation of construction processes–Standardized project execu-
tion–Supervision during execution–Opportunity for time & cost overruns–Time & budget pressures

Subsystem 2: The Interface Between Individual, By way of organization, six feedback loops (R13–R18 in
Cultural, and Organizational Drivers Fig. 5) show that a weak organizational culture is a signifi-
cant causal factor of corruption in the construction indus-
Subsystem 2 describes the interactions between individual, try. These feedback loops regard negative role modeling as
cultural, and organizational drivers of corruption. This sub- key to shifting organizational culture. Feedback loops R13
system provides causal evidence of how conformity to the and R14 demonstrate that organizations whose members
prevailing culture of corruption promotes corruption in the only poorly understand the code of conduct, because of
construction industry. It consists of nine reinforcing feed- poor leadership and participating non-professionals in pro-
back loops, as illustrated in Fig. 5. Additionally, Table 4 jects, are likely to experience corruption. Feedback loops
presents the causal drivers of corruption in each feedback R15 and R16 describe how a weak organizational culture
loop. “Negative role models” and “a culture of deviance” cascades across other organizational factors including poor
are two drivers that trigger feedback loops in this subsystem. organizational governance and short-term strategic goals and
Feedback loop R10 explains how the presence of corruption consequent shortened investment horizon. This cascading
as a norm leads to a culture of deviance in which corruption effect can lead to the absence of effective financial systems,
is practiced by being in the presence of deviant individuals. and ultimately causes a high level of corruption. Similarly,
The culture of deviance creates a culture of secrecy wherein feedback loops R17 and R18 emphasize that such a cascad-
a lack of transparency encourages the fraudulent conceal- ing effect results in ineffective contract monitoring systems,
ment of works, and thereby failure to document practices which is detrimental to the ability of organizations to prevent
and procedures. Information asymmetry can arise as a con- corruption.
sequence of inadequate documentation, which erodes the Subsystem 2 indicates the fundamental importance of
fairness of bidding processes. organizational ethics. This subsystem highlights the role
Feedback loop R11 describes how motivational features organizations play in influencing individual conduct (Phil-
of corruption can affect acts of corruption, individually and lips, 2003). Stakeholder theory is well suited to describe
organizationally. This feedback loop highlights that if cor- how the development of organizational ethics creates a
ruption becomes the expected behavior, an unethical culture culture in which individuals “do their best” to deliver
develops; in turn, reinforcing unethical behavior (Persson organizational values (Freeman, 1984; Freeman et al.,
et al., 2013, p. 457). Feedback loop R12 offers a potential 2004). As long acknowledged in the literature, stakeholder
explanation as to how conformity to the norm tempts indi- theory provides an exciting opportunity to create a link
viduals to choose corrupt alternatives. between ethics and organizational strategies (Harrison &
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 345

Fig. 5  Causal loop diagrams of Subsystem 2

Table 4  Corruption drivers of feedback loops in Subsystem 2

Loop Corruption factors

R10 Culture of deviance–Culture of secrecy–Transparency–Concealment of works–Documentation–Information asymmetry–Unfair bidding

process
R11 Negative role models–Negative encouragement–Cultural behavior–Influence of guanxi–Interpersonal relationship–Conflict of interest–
Unethical behavior
R12 Negative role models–Negative encouragement–Normative cognition–Unethical behavior
R13 Negative role models–Negative encouragement–Cultural behavior–Organizational culture–Leadership–Participation of non-profession-
als–Knowledge of code of conduct
R14 Negative role models–Top management fraud–Organizational culture–Leadership–Participation of non-professionals–Knowledge of code
of conduct
R15 Negative role models–Negative encouragement–Cultural behavior–Organizational culture–Organizational governance–Short-term strate-
gic goals–Shortened investment horizon–Effective financial systems
R16 Negative role models–Top management fraud–Organizational culture–Organizational governance–Short-term strategic goals–Shortened
investment horizon–Effective financial systems
R17 Negative role models–Negative encouragement–Cultural behavior–Organizational culture–Organizational governance–Short-term strate-
gic goals–Shortened investment horizon–Effective contract monitoring systems–Procurement irregularities
R18 Negative role models–Top management fraud–Organizational culture–Organizational governance–Short-term strategic goals–Shortened
investment horizon–Effective contract monitoring systems–Procurement irregularities
346 S. A. Zarghami

Wicks, 2013). In light of the influence of top managers on Subsystem 3: The Interface Between Organizational
moral norms, this theory suggests that “those highest in and Financial Drivers
the governance hierarchy” can significantly contribute to
building an ethical culture in organizations “through the Subsystem 3 illustrates the relationship between organiza-
role modeling of appropriate stakeholder treatment” (Jones tional drivers of corruption and financial constraints; Table 5
et al., 2018, p. 374). shows the causal drivers of corruption in this subsystem.
This subsystem is governed by seven reinforcing feedback
Proposition 2 Anticorruption practices in the construction loops, R19–R25 (as shown in Fig. 6). These feedback loops
industry must be informed by ethically grounded stakeholder portray that corruption in the construction industry is main-
management strategies. As such, these practices must take tained by multiple self-reinforcing vicious cycles, which in
account of a continuum of ethical orientations toward turn provide greater scope for corrupt practices. Subsystem
stakeholders. 3 emphasizes that corruption leads to economic down-
turn, which in turn increases the probability of corruption.

Table 5  Corruption drivers of feedback loops in Subsystem 3

Loop Corruption factors

R19 Economic downturn–Job insecurity–Work dissatisfaction

R20 Economic downturn–Low income–Work dissatisfaction
R21 Economic downturn–Organizational financial constraints–Lack of expertise–Participation of non-professionals–Knowledge of code of
conduct
R22 Economic downturn–Organizational financial constraints–Lack of expertise–Design problems–Contradicting design & bid documents–
Opportunity for time & cost overruns–Time & budget pressures
R23 Economic downturn–Organizational financial constraints–Effective financial systems
R24 Economic downturn–Organizational financial constraints–Effective contract monitoring systems–Procurement irregularities
R25 Economic downturn–Economic survival–Over-competition–Tight margins–Opportunity for time & cost overruns–Time & budget pres-
sures

Fig. 6  Causal loop diagrams of

Subsystem 3
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 347

Feedback loops R19 and R20 are based on the notion of organizational drivers (R. Wang et al., 2020; Yap et al.,
“rational self-interest,” which refers to the tendency of 2022), cultural behavior (Hu et al., 2023), financial fac-
employees in organizations to act based on their self-interest tors (Abdul-Rahman et al., 2011; Ebekozien, 2020), and
(Watson & Sheikh, 2008). These two feedback loops demon- authoritative drivers (Cheng & Darsa, 2021; Hosseini
strate the ways that an economic downturn can be a source et al., 2020). However, in neither case has there been an
of work dissatisfaction among employees since it causes job attempt to identify the high-leverage points where anticor-
insecurity (R19 in Fig. 6) and low income (R20 in Fig. 6), ruption strategies can have significant effects on control-
thereby seeding the ground for corruption. ling corruption.
Feedback loops R21 and R22 depict how corruption is The proposed SD model is the first that analytically
reinforced in organizations that are prone to financial con- determines the best intervention points for anticorruption
straints. These feedback loops posit that financial constraints strategies. To locate the high-leverage points, the network
pose challenges for developing organizational expertise— of interacting drivers of corruption (shown in Fig. 3) is
defined as “the skills and knowledge accumulated through first mapped into a graph of nodes and links, where nodes
prior investments in learning within a domain” (Greenwood denote corruption drivers and links represent the causal
et al., 2019, p. 191). A lack of organizational expertise pro- relationships between these drivers. A graph theory tool
motes corruption associated with design problems in con- called PageRank centrality is then used to measure the
struction projects (feedback loop R22), but also increases relative importance of corruption drivers. The PageRank
the probability of corrupt behavior in organizations because centrality measures the extent to which causal drivers
of participating non-professionals and the subsequent rein- of corruption can affect and be affected by one another
forcement of lack of knowledge of the code of conduct. (Zarghami & Zwikael, 2023). The larger the value of the
Feedback loops R23 and R24 focus on the implica- PageRank centrality of a causal driver, the more potently
tions of ineffective financial (R23, in Fig. 6) and contract this driver can affect and be affected by other drivers, and
monitoring systems (R24, in Fig. 6) for corruption in the therefore, diverting attention to this driver can provide
construction industry. More explicitly, these two feedback leverage to improve outcomes. To explain this in greater
loops explain how financial constraints, resulting from an detail, the real-life example of how the government of
economic downturn, impair the capability of organizations Ghana enacted anticorruption practices to control corrup-
to invest in developing effective financial and contract moni- tion in construction projects is now presented.
toring systems. Clearly, the absence of effective financial Corruption is a major challenge faced by the construc-
and contract monitoring systems results in higher levels of tion industry in Ghana (Ameyaw et al., 2017). The Cor-
corruption in organizations. ruption Perception Index, developed by Transparency
Feedback loop R25 illustrates that, when economic output International ([Link]
falls, organizations undertaking projects have lower liquidity is a widely discussed and quoted indicator that shows the
to survive, which renders the construction industry extremely perceived level of corruption in 180 countries. Ghana
competitive. Over-competition encourages organizations to achieved a score of 43 out of 100 and thus ranks 72 of 180
set lower profit margins, which increases the likelihood of countries in 2022. Over the last 20 years, the Public Pro-
time and cost overruns. In this situation, construction manag- curement Act 2003 (ACT 663) has been used as a means of
ers must make fast decisions based on limited information, controlling corruption in construction projects in Ghana.
which adversely affects corruption in projects. However, despite the enactment of ACT 663, corruption
persists (Ameyaw et al., 2017).
Proposition 3 Corruption in the construction industry is To identify the best intervention points for anticorrup-
affected by, and affects, economic downturn. Consequently, tion strategies, the values of PageRank centrality for cor-
anticorruption reforms must go hand-in-hand with strategies ruption drivers are calculated. An open-source network
to tackle any economic downturn. analysis tool R Package igraph version 1.3 is used to meas-
ure the relative importance of causal drivers of corruption
in the proposed model. Figure 7 provides a graphical illus-
tration. As can be seen, the PageRank centrality assigns
An Exemplar Application of the Proposed the highest score to two drivers: “opportunity for time
SD Model: Identifying High‑Leverage Points and cost overruns” and “time and budget pressures.” This
for Policy Intervention implies that these two causal drivers serve as key leverage
points. As such, anticorruption strategies to tackle these
As discussed above, the literature has extensively drivers can lead to enduring improvements in eradicating
examined the causes underlying corrupt practices in corruption. This explains why ACT 663, which focuses
the construction industry (Shan et al., 2017) including only on public procurement, has caused only transitory
348 S. A. Zarghami

Fig. 7  Values of the PageRank

centrality for corruption drivers

improvements; in other words, ACT 663 does not provide management principles into their decision making. From the
any leverage to effectively address time and budget-related stakeholder theory perspective, incorporating stakeholder
drivers that might manifest during the execution phase of management principles into governmental decisions “miti-
projects. gates the need for industrial policy and an increasing role of
government intervention and regulation” (Freeman, 1998,
p. 132). Indeed, the implementation of stakeholder man-
agement principles in the long run provides an intrinsically
Implications for Policy and Practice oriented means of controlling corruption, where corrupt
practices are proactively addressed (Lange, 2008). Stated
This section presents information cues that governments and differently, the implementation of stakeholder management
policymakers can use in their efforts to control corruption. practices ensures that individuals' behavior complies with
Specifically, it discusses four implications to emerge from ethical rules, thereby reducing the incentives to engage in
the proposed SD model. corrupt practices that might necessitate government inter-
First, a central insight of Proposition 1 is that govern- vention or regulatory measures. The stakeholder perspective
ments are on the front line of the fight against corruption. In on decision making (1) reduces political interference and,
particular, Subsystem 1 emphasizes that promoting democ- thus, counteracts feedback loop R1, and (2) decreases the
racy, governed with accountability, is crucial in controlling permits and approvals bureaucracy that reinforces feedback
corruption. Despite this, most governments, especially in loops R5–R9, thereby countering these vicious cycles.
developing countries with rampant corruption, confine their Third, Proposition 2 accentuates that incorporating
efforts to enhancing their steering capabilities. This high- stakeholder theory into anticorruption strategies is a neces-
lights the need for strategies that foster accountability to sary adjunct to the fight against corruption. Subsystem 2
citizens, the media, and interest associations. Such strategies shows that public acceptance of corruption in the construc-
should improve the capabilities of independent supervisory tion industry increases the level of corruption. Individuals
bodies to monitor and oversee government (Schiller et al., involved in the construction industry continue to engage
2022). This can lead to a balancing process that seeks to in corrupt practices if they perceive corruption as a norm,
balance reinforcing feedback loops R1–R9 in Subsystem 1 rather than a morally wrong concept. In an environment
(see Fig. 4). This balancing process, in turn, underpins the where individuals behave based on their shared expectations
government’s strength in the fight against corruption. of others’ behavior, this will undermine efforts to eradicate
Second, as noted above, Proposition 1 illuminates that corruption (Persson et al., 2013). It is therefore essential for
curbing corruption in the construction industry demands top managers of organizations to reinforce relational ethics
governmental attention. Specifically, Subsystem 1 illus- with stakeholders by “relying on mutual trust and trustwor-
trates the importance of stakeholder participation in the thiness to maintain reciprocal loyalty” (Jones et al., 2018,
implementation and evaluation of anticorruption poli- p. 357). This, in turn, counteracts feedback loops R11–R18
cies, encouraging governments to incorporate stakeholder
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 349

(see Fig. 5), thereby providing a framework for individuals (Box & Draper, 1987). Despite adopting an empirical-ori-
to act fairly. ented GMB technique to ensure the completeness of causal
Finally, Proposition 3 describes that the financial con- links, as a new SD model of corruption, there might be a
straints of organizations, particularly in an economic down- need to add any missing link between corruption drivers;
turn, are likely to increase the level of corruption. This indi- specifically, the connections between the three subsystems
cates that governments, especially in developing countries of the proposed model. Therefore, the suggested links should
with widespread corruption, should act to support construc- be supplemented by eliciting opinions from additional
tion firms by implementing various financial instruments; experts, whose knowledge can increase confidence in the
for example, by easing access to external borrowing. There- proposed model.
fore, policymakers should facilitate the process of obtaining Much remains to be done in future research to address the
external financing in policy design, particularly for private limitations of the proposed model. For instance, this paper
firms in developing countries, which face greater difficulty employed the PageRank centrality to identify the high-lever-
in accessing external finance than public organizations. In age points to assist policymakers in designing interventions.
addition, ethical regulations in developing countries are not However, it did not validate such leverage points nor did it
sufficiently robust, leading to potential gaps in ensuring test the proposed recommendations. This may be achieved
compliance with ethical standards and principles, especially by constructing a stock and flow diagram (SFD) as a promis-
in the context of external borrowing and project finance ing avenue for identifying and modeling leverage points and
(Wörsdörfer, 2015). In this vein, adopting the Equator Prin- policy recommendations. An SFD can evaluate the sensitivity
ciples (EPs)—a standardized foundation and risk manage- of policy recommendations by linking feedback loops and sys-
ment framework for financial institutions to evaluate and tem behavior (Sterman, 2000). More explicitly, an SFD would
handle environmental, social, and ethical issues—strength- be a great help to policy makers in evaluating the effectiveness
ens the ethical commitments of borrowing firms (Martens of anticorruption strategies, by running the model for various
et al., 2019). This is because the EPs impose ethical obli- policy recommendations. Furthermore, this paper demon-
gations on both financial institutions and borrowing firms. strated how interactions between corruption drivers resulted in
Such a balanced approach can mitigate the self-reinforcing multiple reinforcing loops leading to further increases in the
consequences of an economic downturn, which are caused level of corruption. Such reinforcing loops can be examined
by feedback loops R19–R25 in Subsystem 3 (see Fig. 6). in a complementary way by focusing on industry-responsive
ethical principles and a code of conduct. Specifically, future
studies might seek to explore the effectiveness of various ethi-
cal standards in counteracting the vicious cycles that reinforce
Conclusion corruption in the construction industry.
The author believes that this research will resonate with
The literature has tended to study corruption in the con- the interests of business ethics scholars. The findings of this
struction industry by separately analyzing its drivers. This research emphasize that corruption, like many other ethi-
research addressed this problem, arguing that corruption as cal issues, should be understood as a complex phenomenon
a complex phenomenon cannot be understood by dividing it involving social, economic, cultural, and political dimen-
into its drivers; rather, it must be understood by taking into sions. In this context, the author anticipates that business
account the overall pattern. Building on the results of a SLR, ethics scholars, who are concerned about the limitations of
this paper developed an SD model to examine the synergistic an isolated view of ethical issues, will employ the proposed
effect of corruption drivers in the construction industry. The SD modeling approach to examine prevalent ethical mat-
proposed SD model illustrated how the interactions between ters such as environmental ethics, social justice an inequal-
corruption drivers created 25 reinforcing feedback loops that ity, artificial intelligence and privacy, and so forth. More
could increase corrupt activities. To counteract these feed- broadly, the author hopes that this research contributes to
back loops, this paper drew on stakeholder and open systems responding to the recent call for “stepping out our scientific
theories to formulate three propositions that could be used comfort zone” (Nilsen, 2024, p. 4) by expanding the engage-
by policymakers in policy design. ment of systems thinking with business ethics research.
The proposed SD model presents a powerful and concise
Funding Open Access funding enabled and organized by CAUL and
way of modeling the interactions between corruption drivers. its Member Institutions.
Building on four decades of research, the proposed model
also provides lessons that can be helpful in the development Declarations
of policy frameworks to control corruption in the construc-
tion industry. However, as long acknowledged in literature Conflict of interest The author declares that there is no conflict of in-
terest.
and practice, “all models are wrong, but some are useful”
350 S. A. Zarghami

Informed Consent Not applicable. Bowen, P., Akintoye, A., Pearl, R., & Edwards, P. J. (2007). Ethical
behaviour in the South African construction industry. Construc-
Research Involving Human Participants and/or Animals Not applicable. tion Management and Economics, 25(6), 631–648.
Bowen, P. A., Edwards, P. J., & Cattell, K. (2012). Corruption in
the South African construction industry: A thematic analysis
Open Access This article is licensed under a Creative Commons Attri-
of verbatim comments from survey participants. Construction
bution 4.0 International License, which permits use, sharing, adapta-
Management and Economics, 30(10), 885–901.
tion, distribution and reproduction in any medium or format, as long
Bowen, P., Edwards, P., & Cattell, K. (2015). Corruption in the
as you give appropriate credit to the original author(s) and the source,
South African construction industry: Experiences of clients
provide a link to the Creative Commons licence, and indicate if changes
and construction professionals. International Journal of Pro-
were made. The images or other third party material in this article are
ject Organisation and Management, 7(1), 72–97.
included in the article’s Creative Commons licence, unless indicated
Box, G., & Draper, N. R. (1987). Empirical model-building and
otherwise in a credit line to the material. If material is not included in
response surfaces. Wiley.
the article’s Creative Commons licence and your intended use is not
Brown, J., & Loosemore, M. (2015). Behavioural factors influencing
permitted by statutory regulation or exceeds the permitted use, you will
corrupt action in the Australian construction industry. Engi-
need to obtain permission directly from the copyright holder. To view a
neering, Construction and Architectural Management, 22(4),
copy of this licence, visit [Link]
372–389.
Cavana, R. Y., & Mares, E. D. (2004). Integrating critical thinking
and systems thinking: From premises to causal loops. System
Dynamics Review, 20(3), 223–235.
References Chan, A. P., & Owusu, E. K. (2017). Corruption forms in the con-
struction industry: Literature review. Journal of Construction
Abdul-Rahman, H., Wang, C., & Saimon, M. A. (2011). Clients’ per- Engineering and Management, 143(8), 04017057.
spectives of professional ethics for civil engineers. Journal of Cheng, M. Y., & Darsa, M. H. (2021). Construction schedule risk
the South African Institution of Civil Engineering, 53(2), 2–6. assessment and management strategy for foreign general con-
Adelopo, I., & Rufai, I. (2020). Trust deficit and anti-corruption initia- tractors working in the Ethiopian construction industry. Sus-
tives. Journal of Business Ethics, 163, 429–449. tainability, 13(14), 7830.
Aduwo, E. B., Ibem, E. O., Afolabi, A. O., Oluwnmi, A. O., Tunji- Chilakamarri, S. (2023). “Show, don’t tell!”–Popular films for dis-
Olayeni, P. F., Ayo-Vaughan, E. A., Uwakonye, U. O., & Oni, A. cussion of individual values in construction project manage-
A. (2020). Exploring anti-corruption capabilities of e-procure- ment. Project Leadership and Society, 4, 100082.
ment in construction project delivery in Nigeria. Construction Courtois, C., & Gendron, Y. (2017). The “normalization” of devi-
Economics and Building, 20(1), 56–76. ance: A case study on the process underlying the adoption of
Alani, S. H. N., & Mahjoob, A. M. R. (2021). Using AHP to prior- deviant behavior. Auditing: A Journal of Practice & Theory,
itize the corruption risk practices in the Iraqi construction sector. 36(3), 15–43.
Asian Journal of Civil Engineering, 22(7), 1281–1299. Dacin, M. T., Harrison, J. S., Hess, D., Killian, S., & Roloff, J.
Alutu, O. E., & Udhawuve, M. L. (2009). Unethical practices in Nige- (2022). Business versus ethics? Thoughts on the future of
rian engineering industries: Complications for project manage- business ethics. Journal of Business Ethics, 180(3), 863–877.
ment. Journal of Management in Engineering, 25(1), 40–43. Damit, A. P. (1983). Construction cartels. Journal of Professional
Ameh, O. J., & Odusami, K. T. (2010). Professionals’ ambivalence Issues in Engineering, 109(1), 45–49.
toward ethics in the Nigerian construction industry. Journal of de Jong, M., Henry, W. P., & Stansbury, N. (2009). Eliminating cor-
Professional Issues in Engineering Education and Practice, ruption in our engineering/construction industry. Leadership
136(1), 9–16. and Management in Engineering, 9(3), 105–111.
Ameyaw, E. E., Pärn, E., Chan, A. P., Owusu-Manu, D. G., Edwards, Deng, X., Wang, Y., Zhang, Q., Huang, J. X., & Cui, J. (2014).
D. J., & Darko, A. (2017). Corrupt practices in the construction Analysis of fraud risk in public construction projects in China.
industry: Survey of Ghanaian experience. Journal of Manage- Public Money & Management, 34(1), 51–58.
ment in Engineering, 33(6), 05017006. Devine, A., McCollum, M., & Orlova, S. (2022). Cleaning up corrup-
Amoah, C., & Steyn, D. (2022). Barriers to unethical and corrupt tion and the climate: The role of green building certifications.
practices avoidance in the construction industry. International Finance Research Letters, 47, 102929.
Journal of Building Pathology and Adaptation, 41(6), 85–101. Doroftei, I. M. (2016). Measuring government favouritism objec-
Anekwe, C. M. (1987). Contract award—Nigerian experience. Journal tively: The case of Romanian public construction sector.
of Professional Issues in Engineering, 113(3), 229–235. European Journal on Criminal Policy and Research, 22(3),
Antunez, M., Ramalho, N., & Marques, T. M. (2023). Context matters 399–413.
less than leadership in preventing unethical behaviour in inter- Ebekozien, A. (2020). Corrupt acts in the Nigerian construction indus-
national business. Journal of Business Ethics. [Link] try: Is the ruling party fighting corruption? Journal of Contem-
1007/​s10551-​023-​05520-y porary African Studies, 38(3), 348–365.
Apriyanti, W. N., & Rais, K. I. (2020). Fraud risk management in Ebekozien, A., Samsurijan, M. S., Amadi, G. C., Awo-Osagie, A. I.,
construction company: A case study in Indonesia. Journal of & Ikuabe, M. (2022). Moderating effect of anti-corruption agen-
Southeast Asian Research, 2020, 706737. [Link] cies on the relationship between construction corruption forms
5171/​2020.​706737 and projects delivery. International Planning Studies, 27(4),
Arewa, A. O., & Farrell, P. (2015). The culture of construction organi- 336–353.
sations: The epitome of institutionalised corruption. Construc- Esper, S. C., Barin-Cruz, L., & Gond, J. P. (2023). Engaging stake-
tion Economics and Building, 15(3), 59–71. holders during intergovernmental conflict: How political attribu-
Bhagat, G., & Jha, K. N. (2022). Stage-wise evaluation of integrity tions shape stakeholder engagement. Journal of Business Ethics.
risks in public works procurement in India. International Journal [Link]
of Construction Management. [Link] oi.o​ rg/1​ 0.1​ 080/1​ 56235​ 99.​
2022.​21006​23
The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40… 351

Everett, J., Neu, D., & Rahaman, A. S. (2006). The global fight against Lange, D. (2008). A multidimensional conceptualization of organi-
corruption: A Foucaultian, virtues-ethics framing. Journal of zational corruption control. Academy of Management Review,
Business Ethics, 65, 1–12. 33(3), 710–729.
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Le, Y., Shan, M., Chan, A. P., & Hu, Y. (2014). Investigating the causal
Pitman. relationships between causes of and vulnerabilities to corruption
Freeman, R. E. (1998). A stakeholder theory of the modern corpora- in the Chinese public construction sector. Journal of Construc-
tion. In M. B. E. Clarkson (Ed.), The corporation and its stake- tion Engineering and Management, 140(9), 05014007.
holders: Classic and contemporary readings (pp. 125–138). Liu, J., Wang, Y., & Wang, Z. (2023). Multidimensional drivers:
University of Toronto Press. Exploring contractor rule violations in the construction indus-
Freeman, R. E., Wicks, A. C., & Parmar, B. (2004). Stakeholder try. Engineering, Construction and Architectural Management,
theory and “the corporate objective revisited.” Organization 30(4), 1496–1518.
Science, 15(3), 364–369. Luzgina, A. (2017). Problems of corruption and tax evasion in con-
Gioia, D. A., Corley, K. G., & Hamilton, A. L. (2013). Seeking quali- struction sector in Belarus. Entrepreneurship and Sustainability
tative rigor in inductive research: Notes on the Gioia methodol- Issues, 5(2), 263–282.
ogy. Organizational Research Methods, 16(1), 15–31. Martens, W., van der Linden, B., & Wörsdörfer, M. (2019). How to
Greenwood, B. N., Agarwal, R., Agarwal, R., & Gopal, A. (2019). assess the democratic qualities of a multi-stakeholder initiative
The role of individual and organizational expertise in the adop- from a Habermasian perspective? Deliberative democracy and
tion of new practices. Organization Science, 30(1), 191–213. the Equator Principles framework. Journal of Business Ethics,
Gunduz, M., & Önder, O. (2013). Corruption and internal fraud in 155, 1115–1133.
the Turkish construction industry. Science and Engineering Martin, H., Miller, A., Milling, A., & Martin, M. (2023). Examin-
Ethics, 19, 505–528. ing corruption prominence in SIDS–The curse and the cure for
Haque, S., Mahmoudi, H., Ghaffarzadegan, N., & Triantis, K. (2023). construction tender practices. Journal of Facilities Management,
Mental models, cognitive maps, and the challenge of quantita- 21(3), 387–411.
tive analysis of their network representations. System Dynamics Monteiro, B. K., Masiero, G., & Souza, F. D. (2022). Corruption in the
Review. [Link] construction industry: A review of recent literature. International
Harrison, J. S. (2020). Sustaining high performance in business: Journal of Construction Management, 22(14), 2744–2752.
Systems, resources, and stakeholders. Business Expert Press. Mukumbwa, B., & Muya, M. (2013). Ethics in the construction indus-
Harrison, J. S., Felps, W., & Jones, T. M. (2019). Instrumental stake- try in Zambia. International Journal of Construction Manage-
holder theory makes ethically based relationship building pal- ment, 13(2), 43–65.
atable to managers focused on the bottom line. Academy of Nilsen, H. R. (2024). Code Red for humanity: The role of business
Management Review, 44(3), 698–700. ethics as we transgress planetary thresholds. Journal of Business
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, Ethics, 189, 1–7.
and firm performance. Business Ethics Quarterly, 23(1), Okoli, C. (2015). A guide to conducting a standalone systematic litera-
97–124. ture review. Communications of the Association for Information
Hauser, C. (2019). Fighting against corruption: Does anti-corruption Systems, 37, 879–910.
training make any difference? Journal of Business Ethics, 159, Oluseye, O., Oyeyemi, O. A., Ehis, O. G., & Aigbavboa, C. (2023).
281–299. Effects of building contractors’ value systems on corruption
Hilmi, R. R. A. R., Breesam, H. K., & Saleh, A. H. (2019). Readiness manifestations in Nigeria’s construction sector. International
for e-tendering in the construction sector-designing a computer Journal of Construction Education and Research. [Link]
programme. Civil Engineering Journal, 5(8), 1764–1773. org/​10.​1080/​15578​771.​2023.​22039​56
Hosseini, M. R., Martek, I., Banihashemi, S., Chan, A. P., Darko, A., & Orudzheva, L., Salimath, M. S., & Pavur, R. (2020). Vortex of corrup-
Tahmasebi, M. (2020). Distinguishing characteristics of corrup- tion: Longitudinal analysis of normative pressures in top global
tion risks in Iranian construction projects: A weighted correlation companies. Journal of Business Ethics, 163, 529–551.
network analysis. Science and Engineering Ethics, 26, 205–231. Owusu, E. K., Chan, A. P., & Shan, M. (2019). Causal factors of cor-
Hu, H., Deng, X., & Mahmoudi, A. (2023). A cognitive model for ruption in construction project management: An overview. Sci-
understanding fraudulent behavior in construction industry. Engi- ence and Engineering Ethics, 25, 1–31.
neering, Construction and Architectural Management, 30(4), Owusu, E. K., Chan, A. P., Shan, M., & Pärn, E. (2020). An empiri-
1423–1443. cal study on construction process corruption susceptibility: A
Hudson, S., González-Gómez, H. V., & Claasen, C. (2022). Societal vignette of international expertise. Science and Engineering Eth-
inequality, corruption and relation-based inequality in organiza- ics, 26, 325–349.
tions. Journal of Business Ethics, 181, 789–809. Patton, M. (2015). Qualitative research and evaluation methods: Inte-
Jannat, T., Alam, S. S., Ho, Y. H., Omar, N. A., & Lin, C. Y. (2022). grating theory and practice (4th ed.). Sage.
Can corporate ethics programs reduce unethical behavior? Threat Persson, A., Rothstein, B., & Teorell, J. (2013). Why anticorruption
appraisal or coping appraisal. Journal of Business Ethics, 176, reforms fail—Systemic corruption as a collective action problem.
37–53. Governance, 26(3), 449–471.
Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instru- Pertiwi, K., & Ainsworth, S. (2021). “Democracy is the cure?”: Evolv-
mental stakeholder theory can provide sustainable competitive ing constructions of corruption in Indonesia 1994–2014. Journal
advantage. Academy of Management Review, 43(3), 371–391. of Business Ethics, 173(3), 507–523.
Kenny, C. (2009). Transport construction, corruption and developing Petticrew, M., & Roberts, H. (2006). Systematic reviews in the social
countries. Transport Reviews, 29(1), 21–41. sciences: A practical guide. Wiley.
Khieu, H., Nguyen, N. H., Phan, H. V., & Fulkerson, J. A. (2023). Phillips, R. (2003). Stakeholder theory and organizational ethics.
Political corruption and corporate risk-taking. Journal of Busi- Berrett-Koehler Publishers.
ness Ethics, 184(1), 93–113. Rees, M. R., Tenbrunsel, A. E., & Diekmann, K. A. (2022). “It’s just
Kyriacou, A. P., Muinelo-Gallo, L., & Roca-Sagalés, O. (2015). Con- business”: Understanding how business frames differ from ethi-
struction corrupts: Empirical evidence from a panel of 42 coun- cal frames and the effect on unethical behavior. Journal of Busi-
tries. Public Choice, 165, 123–145. ness Ethics, 176, 429–449.
352 S. A. Zarghami

Ren, L., Zhong, X., & Wan, L. (2022). Missing analyst forecasts and Wang, W., Chen, Y., Zhang, S., & Wang, Y. (2018). Contractual com-
corporate fraud: Evidence from China. Journal of Business Eth- plexity in construction projects: Conceptualization, operation-
ics, 181, 171–194. alization, and validation. Project Management Journal, 49(3),
Saim, N. A. I. M., Rahman, I. A., & Ismail, M. F. (2019). The sever- 46–61.
ity of corruption factors in project life cycle from construction Wang, Z., Liu, J., & Guan, X. (2022). Investigating the causal complex-
experts’ perspectives. International Journal of Sustainable Con- ity of corruption in project-based organizations: A scenario anal-
struction Engineering and Technology, 10(2), 8–17. ysis of bidding activity in the Chinese construction sector. Engi-
Santa-Cruz, S., Córdova-Arias, C., Brioso, X., & Vázquez-Rowe, I. neering, Construction, and Architectural Management, 29(10),
(2021). Transparency-based protocol for decision-making regard- 3893–3916. [Link]
ing seismic rehabilitation projects of public buildings. Interna- Watson, G. W., & Sheikh, F. (2008). Normative self-interest or moral
tional Journal of Disaster Risk Reduction, 55, 102116. hypocrisy? The importance of context. Journal of Business Eth-
Schiller, C., Hellman, T., & Pieper, A. (2022). Liberal democracies ics, 77, 259–269.
must demonstrate long-term thinking and acumen in crisis man- Whetten, D. A. (1989). What constitutes a theoretical contribution?
agement. Bertelsmann Foundation. Academy of Management Review, 14(4), 490–495.
Shan, M., Le, Y., Yiu, K. T., Chan, A. P., & Hu, Y. (2017). Investigating Wörsdörfer, M. (2015). Equator principles: Bridging the gap between
the underlying factors of corruption in the public construction economics and ethics? Business and Society Review, 120(2),
sector: Evidence from China. Science and Engineering Ethics, 205–243.
23, 1643–1666. Yap, J. B. H., Lee, K. Y., Rose, T., & Skitmore, M. (2022). Corrup-
Signor, R., Love, P. E. D., & Ika, L. A. (2022). White collar crime: tion in the Malaysian construction industry: Investigating effects,
Unearthing collusion in the procurement of infrastructure pro- causes, and preventive measures. International Journal of Con-
jects. IEEE Transactions on Engineering Management, 69(5), struction Management, 22(8), 1525–1536.
1932–1943. [Link] Yap, J. B. H., Lee, K. Y., & Skitmore, M. (2020). Analysing the causes
Sikombe, S., & Phiri, M. A. (2021). Institutional factors influencing of corruption in the Malaysian construction industry. Journal of
institutionalised supplier development initiatives in the construc- Engineering, Design and Technology, 18(6), 1823–1847.
tion industry in Zambia. Cogent Business & Management, 8(1), Yu, Y., Martek, I., Hosseini, M. R., & Chen, C. (2019). Demographic
1935184. variables of corruption in the Chinese construction industry:
Snyman, R. A. (2022). Games of truth in the age of transparency: Association rule analysis of conviction records. Science and
International organisations and the construction of corruption. Engineering Ethics, 25, 1147–1165.
Journal of Business Ethics, 181(1), 83–96. Zaal, R. O., Jeurissen, R. J., & Groenland, E. A. (2019). Organizational
Soni, M. S. M., & Smallwood, J. J. (2023). Perceptions of corruption in architecture, ethical culture, and perceived unethical behavior
the South African construction industry. International Journal of towards customers: Evidence from wholesale banking. Journal
Construction Education and Research. [Link] of Business Ethics, 158, 825–848.
15578​771.​2023.​21791​38 Zarghami, S. A. (2023). Anatomy of interactions among risk factors
Sterman, J. D. (2000). Business dynamics: System thinking and mod- influencing implementation of building information modeling
eling for a complex world. McGraw-Hill/Irwin. (BIM): A system dynamics approach. Engineering, Construc-
Tabish, S. Z. S., & Jha, K. N. (2011). Analyses and evaluation of irreg- tion and Architectural Management. [Link]
ularities in public procurement in India. Construction Manage- ECAM-​01-​2023-​0011
ment and Economics, 29(3), 261–274. Zarghami, S. A., & Dumrak, J. (2021). A system dynamics model for
Tabish, S. Z. S., & Jha, K. N. (2018). Beyond the iron triangle in public social vulnerability to natural disasters: Disaster risk assessment
construction projects. Journal of Construction Engineering and of an Australian city. International Journal of Disaster Risk
Management, 144(8), 04018067. Reduction, 60, 102258.
Tomoaia-Cotisel, A., Allen, S. D., Kim, H., Andersen, D., & Chalabi, Zarghami, S. A., & Gunawan, I. (2023). Forecasting the impact of
Z. (2022). Rigorously interpreted quotation analysis for evaluat- population growth on robustness analysis of water distribution
ing causal loop diagrams in late-stage conceptualization. System networks: A system dynamics approach. IEEE Transactions on
Dynamics Review, 38(1), 41–80. Engineering Management, 70(2), 605–614.
Ullal, A. (2023). Construction conditions and practices during war in Zarghami, S. A., & Zwikael, O. (2023). Buffer allocation in construc-
Afghanistan. Journal of Construction Engineering and Manage- tion projects: A disruption mitigation approach. Engineering,
ment, 149(5), 05023005. Construction and Architectural Management. [Link]
Vennix, J. A. M. (1996). Group model building: Facilitating team 1108/​ECAM-​10-​2022-​0925
learning using system dynamics. Wiley. Zhai, Z., Shan, M., Darko, A., & Chan, A. P. (2021). Corruption in
Von Bertalanffy, L. (1972). The history and status of general systems construction projects: Bibliometric analysis of global research.
theory. Academy of Management Journal, 15(4), 407–426. Sustainability, 13(8), 4400.
Vu, N. H., Nguyen, T. A., Hoang, T. B., & Cuong, N. V. (2023). Formal Zhang, B., Le, Y., Xia, B., & Skitmore, M. (2017). Causes of business-
firms with bribery in a dynamic business environment. Journal to-government corruption in the tendering process in China.
of Business Ethics, 1(3), 1–19. Journal of Management in Engineering, 33(2), 05016022.
Wang, R., Lee, C. J., Hsu, S. C., Zheng, S., & Chen, J. H. (2020).
Effects of career horizon and corporate governance in China’s Publisher's Note Springer Nature remains neutral with regard to
construction industry: Multilevel study of top management fraud. jurisdictional claims in published maps and institutional affiliations.
Journal of Management in Engineering, 36(5), 04020057.