Contract Form and Procurement Costs: The Impact of Compulsory Multiple Contractor Laws in Construction

Orley Ashenfelter, David Ashmore and Randall Filer

No 5916, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: It is claimed that many regulatory rules enforce inefficiencies in order to achieve the appearance of cost control. We assess the importance of these claims by measuring the effect of New York state's compulsory multiple contractor law on the cost of public construction in New York City. Multiple contractor laws, which exist in many states, prohibit the use of general contractors in order to promote the appearance of competition. Contrasts of construction costs between buildings with identical blind cost estimates indicate that this law increases public construction costs by 8% and increases construction delays by more than a calendar year.

JEL-codes: K11 K42 (search for similar items in EconPapers)
Date: 1997-02
Note: LE
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published as RAND Journal of Economics, Vol. 28, no. 0 (1997): S5-S16.

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