Construction Economics

Economics, Construction

 

in the USSR, the branch of economics that studies patterns of development and the effectiveness of capital construction. Before the Great Patriotic War of 1941–45, construction economics was regarded as part of the science of organization of construction production; only in the postwar years did it develop as an independent branch.

Construction economics deals with questions of the organizational forms of management (specialization, cooperation, concentration, combination, and the creation of production associations) and the planning of capital investment and construction production (forecasting and long-range, five-year, one-year, and routine operational planning of structure, location, and economic regionalization). An important task of the discipline is to substantiate the transition to the planning and evaluation of the performance of construction organizations on the basis of projects that are finished, turned over to the customer, and ready to operate.

Construction economics conducts research in the economic efficiency of capital investments and of scientific and technological progress in construction (factors, criteria, indicators, and planned standards) as the decisive prerequisite for increasing labor and capital productivity, improving the utilization of material resources, accelerating the growth of production capacities (primarily as a result of the reconstruction, technical reequipping, and modernization of enterprises), achieving the earliest possible use of new production capacities, and attaining projected technological and economic indicators.

Construction economics works out the economic principles underlying construction planning, the standardization of construction work, the industrialization of construction (with due regard to time, ecology, urban planning, and the social and economic impact), and the lowering of estimated costs and capital investments per unit of output. An important function of the discipline is to develop a system of interrelated cost and physical standards (planning, production, estimated, accounting, and statistical standards) for the technological and economic regulation and management of construction production in all phases of the investment process.

Construction economics studies the resources of capital construction and the effectiveness of their utilization, including questions relating to the development of the material and technical basis, fixed capital stock and its reproduction, the creation of normative circulating capital in the construction industry, the training and utilization of personnel, the organization and improvement of labor productivity, the improvement of the wage system, and the organization of the system of material and technical supply.

Construction economics substantiates economic methods of management and incentive in capital construction: profit-and-loss accounting (economic accountability), financing and crediting of construction, and the system of mutual settlements of accounts between participants in the construction process, stemming from efforts to bolster the role of economic incentive in the acceleration of scientific and technological progress.

Construction economics is associated with national economic planning, with a number of special economic disciplines (finance and credit, statistics, accounting, and analysis of economic performance), and with sciences that study the production technology of construction. It serves as a necessary methodological basis for determining the effectiveness of technical solutions to problems in the designing of construction projects and in the performance of construction work.

Construction economics is studied at a number of specialized scientific research institutes, such as the Scientific Research Institute of Construction Economics, the Central Scientific Research and Experimental Planning Institute of Automated Systems in Construction, and the All-Union Scientific Research and Planning Institute of Construction Labor. Economics sections (laboratories and departments) are found in virtually all planning and scientific research institutes working in the various areas of capital construction. Publications in the field include the journal Ekonomika stroitel’stva (Construction Economics) and the newspaper Stroitel’naia gazeta (Construction Newspaper); the publishing house Stroiizdat also publishes works on construction economics. Questions in construction economics are widely discussed in the Soviet press.

REFERENCES

Sokol’skii, V. A. Printsipy ekonomichnosti i ikh vyrazhenie v sovremennom stroitel’stve. St. Petersburg, 1910.
Khachaturov, T. S. Ekonomicheskaia effektivnost’ kapital’nykh vlozhenii. Moscow, 1964.
Vainshtein, B. S. Nauchno-tekhnicheskii progress i povyshenie ekonomicheskoi effektivnosti v stroitel’stve. Moscow, 1964.
Reinin, S. N. Problemy tsenoobrazovaniia i smetnogo dela v stroitel’stve. Moscow, 1965.
Krasovskii, V. P. Problemy ekonomiki kapital’nykh vlozhenii. Moscow, 1967.
Ekonomika stroitel’stva. Edited by B. Ia. lonas and S. N. Reinin. Moscow, 1977.

B. IA. IONAS

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