Study On PPP Risk Governance From The Perspective Of Bounded Rationality

PPP is a new model for the government and social capital to jointly promote the construction of public utilities.By introducing social forces and utilizing social capital,technology,management and market mechanism,PPP can enhance the government's supply capacity for public goods and improve the supply efficiency,which is conducive to the sharing of public risks and the innovation of supply mechanism.In 2014 the central government issued positive policies,and provinces launched large-scale PPP projects.However,after more than four years of rapid development,local governments have been vigorously promoting PPP,resulting in extensive abuse and huge hidden financial,political and social risks.The central government's supervision of PPP has been continuously upgraded.A large number of PPP project withdrawal shows that the government's introduction of PPP cannot guarantee the maximization of expected public interests,and the problem of risk governance directly affects the normal development of PPP.It is necessary to further study the problem,find out the root cause of the problem and find solutions,which is of great significance for the government to transform functions and enhance the supply capacity of public goods and services.The risk management of a project involves multiple actors,including the government,market,society,consulting agencies,etc.However,due to the external causes such as the complexity of public services,the incompleteness of PPP contracts,as well as the internal causes such as the lack of ability and interest preference,each actor follows the finite rationality,resulting in the bounded rationality characteristics of his behaviors.The constraint of the bounded rationality in reality makes it difficult for them to make the optimal choice under the traditional assumption,and finally leads to the risk governance problem of PPP projects.This paper takes A city as a case study by qualitative research method and through in-depth interviews,literature review and document review,summarizes the following problems in risk management of PPP projects in the three stages of risk identification,risk allocation and risk control.First,risk identification is incomplete.Due to the weakness of PPP related laws and regulations and the lack of professional talents and experience in PPP operation,early decision-making of PPP projects is biased,and all parties fail to anticipate the possible risks.Second,risk mismatch.The government/enterprise/society has a weak awareness of risk governance of PPP projects,and each party has undertaken risks that should not be undertaken by itself.Third,the failure of risk control.When there is a problem of risk governance,all parties fail to form a risk co-governance mechanism,and all actors are unable to effectively and properly deal with risks.After the question is raised,this paper starts from the theoretical perspective of the hypothesis of bounded rationality,and analyzes the interest preference,information asymmetry and other considerations of bounded rationality of each actor,which are the reasons for the risk governance problems of PPP in terms of risk reversal,risk cannot be fully measured and misallocated,and risk cannot really be transferred to the party with risk control ability.Finally,based on the experience of the British government in the risk management of PPP,the following countermeasures are proposed: First,improve the early decision-making system of PPP projects and effectively identify and predict risks.Second,establish a good risk management system to ensure effective risk allocation.Third,improve the PPP legal system and strengthen our ability to manage and control risks.