Yeah I think this is correct. It's rational for the prime contractor to increase his prices when he can deliver "value" in the form of greasing the wheels with

Yeah I think this is correct. It's rational for the prime contractor to increase his prices when he can deliver "value" in the form of greasing the wheels with subcontractors and inspectors. At least on the inspector side, I wonder if governments started privatizing home inspection if this would help establish a more "market-based" treatment of builders. The city could honor certain third-party inspections as being "reasonable" for permitting. I could see this working even better if the inspection service bills the building owner rather than the builder. Then the incentivizes are aligned for a fair inspection and fair treatment of builders that is in the owner's interest.