Causal relationships of moral hazard and adverse selection of Ghanaian Public-Private-Partnership (PPP) construction projects

Purpose: The purpose of this paper was to assess the causal relationship(s) between moral hazard and adverse selection of public–private partnership (PPP) construction projects. Structural equation modelling (SEM) was used to explore the cause and effect relationship between moral hazard and adverse selection problems in PPP construction projects in Ghana. The study produced a framework to predict, estimate and depict the complex causal relationships (i.e. the directionality) between moral hazard and adverse selection. Design/methodology/approach: To test the proposed framework, a quantitative methodology was used, in which, data were collected using research questionnaires that targeted a sample of 280 PPP stakeholders in Ghana. In total, 210 useable questionnaires were retrieved, representing a response rate of 75 per cent. Findings: The interrelationships between the eight causes and the nine effects of moral hazard and adverse selection were established using the model. The tested framework showed the degree of association and isolation of the unobserved variables on the indicator factors. Confirmatory factor analysis (CFA) was used to evaluate the fit of items to latent constructs. Because the fit of each model was good and the item loadings were adequate, it was assumed that the indicators of the different variables factors were fitting. Furthermore, a diagnostic fit analysis was conducted using the robust maximum likelihood method to test the statistical significance of the parameter estimates. Practical implications: This novel research is one of the few studies investigating the causal relationships between moral hazard and adverse selection of PPP construction projects. The research concluded with future studies that seek to validate the model developed in other countries and/or other industries. Originality/value: The research findings will serve as a guide for construction stakeholders in the PPP sector on the causes and effects of adverse selection and moral hazard and how to mitigate these

An empirical examination of moral hazards and adverse selection on PPP projects: A case study of Ghana

Purpose: Failures of public–private partnership (PPP) projects are often ascribed to the agency problem, which arise under conditions of inadequate and asymmetric information when a principal (the client) hires an agent (the contractor). This paper aims to identify the causes and effects of moral hazard and adverse selection on PPP construction projects using a synthesis of extant literature (to determine key variables) and analysis of survey questionnaire data collected. Design/methodology/approach: Mean score ranking was used to rank the causes and effects of moral hazard and adverse selection problems in PPP construction projects. One sample t-test was conducted to establish the relative significance of these variables. Findings: Effort dimensions (which are not verifiable), low transfer of risk, lack of accurate information about project conditions, wrong party chosen to execute project and renegotiation of contracts were the most significant causes of moral hazard and adverse selection problems in PPP construction projects. In addition, reduction of competition, high transaction costs, consequences on profitability of project, siphoning of funds and negative implications on enforceability of contract were the most significant effects of moral hazard and adverse selection problems in PPP construction projects. Practical implications: Application of these findings will help mitigating moral hazard and adverse selection problems occurring when undertaking PPP construction projects. Originality/value: Research findings provide guidance to construction stakeholders in the PPP sector on the different causes and effects of adverse selection and moral hazard. This pioneering study is the first to conduct an empirical assessment of the causes and effects of moral hazard and adverse selection of PPP construction projects in a developing country

An assessment of the level of emotional intelligence attributes of undergraduate built environment students in developing countries

Built environment students graduate with good technical skills but often lack the rudiments of management and leadership skills. Other challenges they face, among others, include interpersonal skills, emotional skills, self-awareness and impulse control. This article presents a case study assessing the emotional intelligence (EI) attributes of built environment students. EI questionnaires (Emotional Quotient Inventory (EQ-i)) were distributed to fourth-year undergraduates studying construction-related courses at Kwame Nkrumah University of Science and Technology in Ghana. A total of 182 questionnaires were completed and retrieved from the fourth-year students. Analytical tools included descriptive statistics, mean score ranking, regression and correlation. Construction technology management students had the highest EI value, followed by civil engineering students, quantity surveying and construction economics students and lastly architecture students. There was no significant difference in the overall EQ-i scores of the students. Furthermore, there is insignificant correlation between the built environment programmes and the EI level of the students. The results illustrate that the EI level of the students is not statistically dependent on the programmes undertaken. From regression analysis, age is a significant predictor of EI. This study presents a methodology for assessing the EI levels of built environment students in developing countries and adds to the body of knowledge. The work concludes with directions for future research

Clash of Civilization or Clash of Newspaper Ideologies? An Analysis of the Ideological Split in British Newspaper Commentaries on the 2002 Miss World Riots in Nigeria

Riots that erupted in the northern Nigerian city of Kaduna over a newspaper article that some Muslims interpreted as blaspheming the Prophet Muhammad on account of Nigeria’s decision to host the 2002 edition of the Miss World beauty pageant captured the attention of the media around the world. This article investigates how the British press framed the riots in their opinion columns and editorials. Through an interpretive textual analysis of the opinion pages, the study shows that while the ideological persuasions of left-leaning British press predisposed them to express opinions on the Miss World riots that resonated with what might loosely be characterized as the “Islamic perspective,” those of the conservative British press shared ideological similarities with what might be considered the standpoints of the “liberal,” predominantly Christian, southern Nigerian newspapers. This highlights the limited utility of such facile labels as “liberal” and “conservative” in describing the ideological temperaments of the press. It also problematizes notions of media imperialism and exposes the theoretical and empirical inadequacy of gazing at local religious conflicts from the perspectives of international religious contexts