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. This required the development of a system of measurement, removed the master craftsmen from direct contact with the arhitect while the arhitects were required to produce complete designs before tender.
In civil engineering this trend had a similar outcome in the adoption of the professional system. The building of infrastructure, like roads, railways and canals, was supported by private investments. The private promoters were sometimes landowners or other interested parties but in the railway sector they were mostly engineers. In the beginning, the works were divided into small lots who were built by local contractors, closely supervised by the engineers. But during the 1st half of the 19th century, the role of the general contractor who took on a broader responsibility for the works emerged. While the momentum of building grew, contractors took over the promotion task as well, raising the finance
