The dynamics of adversarial relations
The attempts by clients to manage the problem of moral hazzard and to reduce the scope of opportunistic behaviour by the contractor have the tendency to generate vicious circles of adversarial behaviour between parties.[1]. The dynamic of adversarial relartions created by the client's desire to get the 'best deal', can generate an escalation of the transaction costs while the costs of production seem to be pushed down. [2].
History
The emergence of general contracting in Europe is associated with the housing crysis following World War II while in Britain this happened much earlier, during the first half of the 19th century after the civil war and the rebuilding of London after the great fire. A shift to 'contracting in gross', where a single contractor undertook the financial responsibility in a single contract for the entire work, had to be done because of the urgency in the building programme.
