Construction For Projects In The Field Of Delinquency And Prevention Mechanisms

Construction is one of the most important pillar industries in our country's national economy. It plays a significant promoting role in the growing national economy and social development. Since over thirty years of reform and opening, our country's construction has formed a considerable scale, led quick development of steel, building materials, transportation industry, and so on. However, the thirty years is also a period of profound change in our country's economy system. Large scale of construction and development, large flows of migrant workers, immature operation mechanisms of construction market, and other factors, birth to an economic phenomenon, defaults on construction costs, which becomes an outstanding problem in construction field. It seriously undermines the social and economic order, affects the normal production and operation, and damages the environment of fair competition and orderly trading. It badly impacts the healthy development of the construction industry, threatens the quality and safety projects, defaults wages of peasant-workers and hinders the process of socialist rule of law and clean government, severely distorts the relationship of social credit. Therefore, establishing a prevention mechanism for defaults on construction costs is imperative.This paper takes defaults on construction costs as research object, analyzes the status of default through large amounts of data and phenomenon, focuses on the principal - agent theory, game theory and incomplete contract theory to find the root causes of default, and learns relevant experiences from the developed countries, initially builds the prevention mechanism for defaults on construction costs, which includes five areas: improving the relevant legal system, completing the government's regulation mechanism, establishing of risk prevention system, accelerating the development of credit system, and creating a good credit environment. I hope this paper could provide theoretical support and policy recommendations by providing these countermeasures.