Research On The Incentive And Supervision System Of Public-Private Partnership From The Perspective Of Government Risk Avoidance

Attributed to the acceleration of China's urbanization process,the country's infrastructure needs are increasingly growing.How to provide high-qualified infrastructures effectively is an urgent problem for the Chinese government.Since 2013,Ministry of Finance of the People's Republic of China has issued series of related policies on Public Private Partnership models,in the same time,the number of Public Private Partnership projects has grown rapidly.The construction of infrastructure projects usually cost prodigiously,but the operation of the project is quite inefficient,usually followed by the phenomenon-market failure.By leading private corporations to infrastructural projects,the government can relive the financial pressure.In this way,the efficiency of the PPP projects can be improved,the market failures,to some extent,can also be reduced.Thus,in this way,the vigorous PPP model has turned into the best choice for the Chinese government to carry out the infrastructural construction.However,with the popularity of this model,many problems are arising.The private part can adopt speculative actions to achieve a higher profit by using its information superiority.The behavior results in less than the maximum social welfare of the project;what is worse,it could fail the project and cause giant losses for both public and private parts.The problem could affect the overall operational efficiency of the project,reduce the product and service quality,and damage the social welfare expected by the government.If it fails,the public-private partnership model will be terminated consequently.Therefore,how to rationally apply the supervision and incentive measures to the construction and operation part of the project,and reduces the speculative behaviors caused by information asymmetry,has become the key point to a successful public-private partnership project for the government.This paper first introduces the background of Chinese public-private partnership mode,and then reviews the relevant domestic and international theoretical researches,explains the related concepts involved in the article,then makes statements about the current status of Chinese Public Private Partnership,and points out problems in the incentive and supervision mechanism under PPP mode.After articulating the related theories and situations,the paper tries to set up a model of principle-agent theory to analyze the relationship between the incentive-supervision methods of the public sector,and the effort degree of the private sector.This paper then obtains the microdata in the running public-private partnership projects by using a questionnaire survey.After that,the article uses the factor analysis to process data,then extract several factors from the incentive and supervision measures.We then rank these factors by scores they get to show their efficiency in the operation.After that,we use two classical examples to verify effective and important measures in the public-private partnership.This paper aims to find out the relationship among the incentives,supervision measures and the effort degree or both public and private sectors,and then we use the microdata to explicate the efficiency measures in the projects and sort the importance.At last,we put forward reasonable and practical advices for the operation of public-private partnership projects in China.Through the literature review and the introduction of the status quo in the forepart of the article,this paper reveals that the incentive and supervision system of publicprivate partnership mode in China is not perfect at this stage.Excessive department participation and hierarchical setting are likely to cause the functions of various departments in the project to overlap and the supervision efficiency to be low.In addition,the current legal system related to the public-private partnership model cannot keep up with the pace of the cover model.The degree of government incentives and incentives still need to be improved.After the model analysis and empirical analysis,this paper draws four conclusions.First,in public-private partnership projects,government incentives and supervision are indispensable.Reasonable incentives for monitoring can mobilize the enthusiasm of the private sector and enhance their efforts.Second,apart from the government incentives and supervisions,the efficiency of the private sector can also influence its efforts.A private sector with higher productivity is more likely to increase its efforts.Third,strengthening the government's own regulatory efficiency can also enhance the government's regulatory intensity.Under the current strong supervision policy in PPP,government departments need to coordinate their inner departments rationally and improve their own regulatory efficiency.Fourth,the excessive supervision intensity of government departments may have a negative effect on incentives,thus affecting the enthusiasm of the private sector.Therefore,government departments need to reasonably strengthen the intensity of supervision,so that incentives and supervision can complement and balance each other to avoid overcorrection.