Building relations: Corruption, competition and cooperation in the construction industry

Abstract

Building things has been the essence of development in Indonesia, at least since the oil boom began in the mid-1970s. Indeed, the word pembangunan, a central trope of the New Order regime, means both �development� and �building� (Heryanto 1988). But the very large construction industry is plagued by poor standards and corruption. It is widely known that money is routinely skimmed off construction contracts to pay off tendering committees, public works bureaucrats and other officials with influence over the allocation of public construction contracts, reducing the quality of the material and work. Construction contractors are an important part of the politico-business elite, especially in the regions, and it is often their political connections rather than their construction expertise that lands them the most lucrative construction contracts.

The approach in the recent wave of expert reports by multilateral agencies is to view problems of corruption and standards in the industry as public policy issues amenable to improved regulation. Beginning with a set of �international best practice� norms, they develop sophisticated indices showing where Indonesian institutions fall short, and conclude with policy recommendations. But this normative approach lacks explanatory power. The present chapter aims to explain rather than prescribe. It seeks to account for the resilience of corrupt practices by viewing the construction industry ethnographically, namely as a set of social actors who strategize to promote their interests.