The current discussion about the challenges in large construction projects in Germany primarily focuses on aspects such as digitalisation, lean construction, and approval procedures. A new scientific publication, the 'Theory of the Rational Client', however, identifies the client's role in an early project phase as the primary cause for the failure of many real estate projects. This specialist book thus proposes a fundamental shift in perspective that goes beyond previous debates.
Germany is currently undertaking infrastructure investments on a scale not seen for decades. Public and private clients will be responsible for billions of euros in the coming years for roads, railways, energy supply, hospitals, housing construction, and defence. However, observation shows that almost every large project follows recurring patterns: cost overruns, delayed completions, and protracted disputes. Public discourse in this context often concentrates on construction companies, supply chain problems, approval processes, or the shortage of skilled workers.
The Authors' Thesis
The recently published work by Friedrich Prem, Dr. Christoph Pfeiffer, and Prof. Dr. Christian Rieck challenges this common view. The authors argue that many large projects do not fail on the construction site, but much earlier in the process. According to them, the decisive risk factors lie not in the execution itself, but in the way clients organise projects, delegate responsibilities, and design incentive systems. The authors emphasise that the biggest risks often arise where decisions are made, and not just in the implementation phase.
The publication criticises that despite years of discussions in politics and business about digitalisation, lean construction, or the acceleration of approval procedures, a scientifically sound theory on the client's role in project success has been lacking until now. The book aims to close this gap. The authors combine their decades of experience from complex construction and infrastructure projects with insights from game theory, principal-agent theory, and systems theory. This combination enables the development of a model that explains why even technically excellently planned projects can fail if responsibilities, information flows, and incentive systems are not adequately structured.
Five Principles for More Robust Projects
The authors identify five key levers by which clients can reduce information asymmetries, avoid perverse incentives, and manage projects more robustly. Their claim extends beyond the construction industry, as the developed principles are intended to be applicable to all areas in which organisations are responsible for complex investment and change projects. In view of the extensive infrastructure investments ahead, the book makes an important contribution to the construction industry as well as to the current economic and socio-political debate about the future of public investments. The publication calls for a radical shift in perspective when considering infrastructure projects to minimise future failures and enable more efficient realisation.
