Integrity Matters
October 12, 2005

Red tape clogs the construction industry

Question: (E-208)

Dear Jim:

Why are there so many government agencies and so much red tape associated with building almost anything?


Integrity, or the lack thereof, seems to explain the increasing number of regulations established to monitor the construction industry. The logjam of our court system is related to the gigantic number of lawsuits arising from conflicts between those in the construction trades and their clients, many of whom become ex-clients. Misunderstandings aren't the same as misrepresentations. Delays are different from deliberate slowdowns. Incompetence and construction sloppiness risk lives and waste time and money. Politicians and civil servants feel pressure to refine and extend regulations, sometimes damaging the free market in the process.

Given the steady growth of the construction industry, it's not surprising that rules and regulations have been compounding. Monitoring construction is a critical government responsibility because it involves safeguarding people and protecting them from fraud and abuse.

When plumbing fails because of faulty equipment or incompetent installation, and it isn't fixed in a timely manner, what recourse does the customer have but to turn to the government? When property owners ignore proper standards, what choices do frustrated neighbors have but to seek legal sanctions? Unfortunately, the 6 percent who cause the majority of the problems make life tough on everyone. Pieces of wood that should match and don't are painted to hide a problem, creating a fraud. Structural defects, which might later cause damage or even death, are masked in the name of coming in on time and within budget. The list goes on.

Government employees realistically assume the worst and seek to police the entire construction process from planning to final approval. Then, when these same agencies discover they were yet again conned by the cunning, they redouble their efforts to control the situation.

This creates a widening circle of stifling red tape.

Predictably, sincere and dedicated government bureaucrats cause the "building regulations" gauntlet to become increasingly frustrating and unpleasant. However, there is a rock-solid solution: integrity-centered behavior.

It should be common knowledge that free markets, including the construction industry, must operate in a culture of compliance or face increasing government oversight. But legitimate oversight is not license for regulatory abuse. A free-market economy prospers, even better, with integrity-centered partnerships that foster honest communication and build trust.

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