The Dutch construction industry: A combination of competition and corporatism

The development of the contracting system in the Dutch construction industry is presented in terms of the poldermodel of corporatist institutions. Although stiff competition exists between construction firms, corporatist arrangements have developed in The Netherlands to reduce high costs and risks to individual firms. The implications and benefits of these corporatist arrangements for research and development, employment, training and housing investment are assessed and concluded to provide well-balanced market competition and regulation while maintaining long-term needs. The relationships between the many parties in the construction process (clients, investors, contractors, suppliers, designers and regulatory authorities) are analysed. A particular area in which corporatist arrangements have predominated is in tendering for public works, where there is a tradition of price-ringing on the grounds that this reduces transaction costs and favours social solidarity. However, the European Commission has banned such arrangements on competition grounds. The Dutch construction industry's attempts to reform tendering arrangements on a more competitive basis, while retaining the valued aspects of the poldermodel are assessed.