Regulatory Mechanisms Based On The Behavior Of Owners Of Principal - Agent Theory Of Government Investment Projects

Since the reform and open-up, the construction industry of Chinahas obtained great achievements. Due to the undeveloped legalregulations and the lack of market supervising, a variety of phenomenaare still existed in the construction market, especially in the field ofgovemmental investing project construction. This paper chooses theclient's behavior of the governmental investing project as the studyobjective, in order to set up a reasonable constraint-mechanism, to seekthe effective paths.First of all, the paper defines the conceptions of governmentalinvesting project and "the irregular behavior of the client", comparingand analysing the project management modes of home and abroad.Simultaneously, the study discusses the performance of "the irregularbehavior of the client" and the influence on other entities in theconstruction markets.Secondly, on a basis of the "Principle- agent" theory, this paperpresents the relationship of "Principle- agent" in governmental investingprojects and the maintaining basis of the relationship. At the same time,this paper also discusses the double roles of the client in governmentalinvesting projects, and through analyzing the game theory, elaborates thecauses of "the irregular behavior of the client".Finally, the research emphasis and objectives are presented. Thepaper established the constraint-mechanism of the client's behavior in thegovernmental investing projects, including behavior evaluation,supervising mechanism and incentive mechanism, in which behaviorevaluation is the foundation of the two others. As to behavior evaluating,the paper discusses the actual sense and feasibility, put forward twoconcepts of behavior process evaluation and behavior result evaluation,sets up evaluation indices system respectively, conceives of theimplementation of the evaluation system; As to supervising mechanism,the paper analyses the basics of its formation, describes the details of its implementation based on the reasonable agent cost; Regarding incentivemechanism, based on the analysis of its establishment reasons, the paperfurther studies the united incentive for the client and the contractor ofgovernmental investing projects, according to the model of incentivemechanism, discusses the implementation path.As to the part of the case study, with the background of a city-circledhighway project in a certain city, the paper discusses a real example inwhich the Road&Bridge Coporation in the city, as the client ofgovernmental investing project, accomplished the task of projectmanagement under the effective constraint-mechanism, achieving anoutstanding success, tests the scientific value and feasibility of thetheoretic research outputs in the paper.