The Study Of Allocation Of Control Rights In Public-Private Partnership Project

Public Private Partnerships (PPP) is institutional arrangement form relating to infrastructure construction. The essence of the PPP is exerting advantages of public department and private department to cooperation adequately. From middle and later periods of 1990s, PPP model had a great application in America and many European countries, and had a revolutionary influence on the supply of public infrastructure services. In the future decade, there is a huge demand for infrastructure in our country. Financial funds can't meet the requirement of infrastructure construction. It's very important to introduce all kinds of social resources including private department, and achieve resource allocation efficiently. Therefore, in the period of the rapid economic development and new stage of reforming and opening, enhancing the collaboration between public and private department not only has important practical significance, but also has a bright future.Three PPP's characteristics that are different to other traditional cooperation models are as follows: the high public extent of goods, the different property of each department, long time of collaboration. As the recent research stick at concept analysis, qualitative analysis in the necessity of partnership, quantitative analysis in the risk management, there are some localizations in the research angle of view, content and method, also have no embedded analysis of the essence of the PPP. From the angel of incomplete contract and relational contract, this paper considers that the allocation of control rights plays a pivotal role in the efficiency of PPP projects.This paper proceeds as follows. From the essence of the PPP, we firstly introduce theories of incomplete contract, control rights and efficiency, relational contract, consider that the allocation of control rights plays a pivotal role in the efficiency of PPP projects. Secondly, comparing primary points and conclusions with these theories, such as GHM, BG and FM, we present a framework of the allocation of control rights in PPP model, point out that main factors impact on the allocation way of control rights in PPP model are as follows: each department's investment importance, the estimate of values of goods, the public extent of goods, measurement of values of goods and long-term period of cooperative relationship. Then we establish a model to analyze the allocation of control rights in PPP projects and its effect on cooperative efficiency, analyze the relation between the optimal investment level of public, private department and control rights, the optimal range of control rights in different conditions, the cooperative efficiency with government guidance. At last, to ensure correctness of conclusions, we simulate and validate data by putting function match condition into models.