Research On The Government Compensation Mechanism Of Public Cultural Public Private Partnership Projects

In order to solve the problem of shortage of funds and improper management in the government’s construction of public infrastructure,China introduced a PPP model in the field of infrastructure construction,that is,the government and the private sector of society jointly fund the construction of this infrastructure project.A financing model that uses a certain period of operating income as revenue,and both parties share revenue.Today,the PPP model has entered into various fields of providing public services,the most common including highway projects,garbage disposal projects,underground pipe gallery construction projects,and gradually applied to museums,cultural square construction,ancient city protection and other public cultural projects.However,the general PPP model is often applied to public products or quasi-public products.It has the characteristics of long construction period,high investment and low profit after putting into operation in the later stage.It is difficult for the future cash flow to recover its huge investment in the early stage,so the government needs to give certain compensation to the project.Especially for public cultural projects with quasi-public interest characteristics,there is almost no income during the operation period of such projects,and the early investment of private capital parties is basically impossible to be supplemented by the later operation income.From the perspective of "profit seeking",the private capital parties may guarantee their own interests maximization by "stealing work and reducing materials" or even terminating cooperation,so the government gives private capital.Therefore,the government gives private capital parties certain compensations that are conducive to stimulating the high-quality construction of private capital parties,and reasonable government compensation is the government and private capital parties in PPP mode One of the keys to maintaining long-term cooperation.In view of the government compensation mechanism of public cultural PPP projects,the existing literature has made some research and reached a very valuable conclusion,but there are still problems in the current government compensation mechanism of public cultural PPP projects,such as the high revenue promised by the government and the difficulty in determining the compensation amount.In addition,the development of behavioral economics theory proves that the actor will be affected by psychological factors such as fairness in the decision-making process.Some scholars have applied fairness preference to the research of supply chain and principal-agent theory,and the agent’s fairness perception will affect the principal-agent efficiency.In this context,in order to make government compensation attract the private sector to participate in public cultural projects and ensure the efficiency and fairness of cooperation,and determine a reasonable compensation method and amount,this paper intends to establish a government compensation model from the perspective of fairness preference.Specifically,this paper uses the compensation method of combining construction period compensation and operation period compensation,establishes the private expected benefit function on the basis of single period government compensation,and analyzes the impact of private sector’s fair preference on the government’s optimal decision-making in public cultural public-private joint venture projects by using the master-slave game method.The results of model analysis and numerical analysis based on the example of Liuzhou Cultural Plaza project show that:(1)Under the conditions of the government compensation contract,the initial investment amount of the project changes with the change in the fairness of the private sector.When the compensation coefficient during the operation period is much smaller than the difference between the government’s promised income and the project’s expected income,the project’s initial The investment amount increases with the increase of fairness preference;when the compensation coefficient during the operation period is much larger than the difference between the government’s promised income and the project’s expected income,the initial investment amount of the project decreases with the increase of fairness.(2)The government’s optimal compensation has nothing to do with the income of similar public cultural projects in the society,and it is related to the comparison of the actual income of the project with the social average level,but the optimal compensation coefficient and the fairness preference intensity coefficient during the operation may not always be positively or negatively correlated.The relationship is different according to the situation of different projects,which shows that the determination of government compensation needs to be determined according to the situation of different projects.(3)The higher the project value of a public cultural PPP project is,the higher the project value is,the more it requires during the operation period and the private sector’s initial investment,and it has a negative correlation with the marginal cost of public funds.The above results not only provide the government and private investors with a decision method for public cultural PPP projects,but also provide a theoretical basis for the government’s management of public cultural PPP projects.Generally speaking,this paper introduces fair preference into the government compensation model and obtains the optimal decision of government compensation through the reverse induction method.It theoretically analyzes and discusses the influence of fair preference on the investment decision of the private sector.On the basis of the case,it uses the numerical analysis to verify the theoretical results,so as to improve the decision-making of the government in the public cultural projects and other quasi operational projects It provides theoretical basis and practical guidance to realize the efficiency and fairness in the public-private cooperation,and has certain significance to protect the interests of both sides,mobilize the enthusiasm of the private sector,and promote the development of public cultural industry.