Comparative Review of the Magnitude of Transaction Costs in Construction Procurement Projects between Developed and Developing Countries

Abstract

Contracting business in public sector within various counties has a transaction cost to incur. This paper reviews transaction costs magnitude of developed and developing countries using standard sampling and procedure by analyzing data from four (4) developed countries; United States of America, United Kingdom, Newzealand, and Czech Republic and two (2) developing countries in Africa; Ghana and Nigeria. According to thefindings Newzealand have the highest TCs magnitude among all countries compared of about 16.5% averagely and with Czech Republic with 0.13% minimum that are incurred by stakeholders when bidding public sector construction projects. This is an important comparison and strengthens the assumption that there is a significant link between transaction costs incurred in bidding and public sector procurement, and that reducing such costs must be important for the contracting firms of various countries. Keywords: Construction, Comparison, Magnitude, Procurement, Transaction Cost.