Prospects and Challenges of Public-private Partnership Model for the Development of China's Infrastructure

Authors

  • Ling Wang Zhejiang University of Finance and Economics, China Institute of Regulation Research
  • Xiaofeng Qi Zhejiang University of Finance and Economics, China Institute of Regulation Research
  • Lihong Zhou Zhejiang University, School of Economics

DOI:

https://doi.org/10.4335/10.4335/20.2.321-346(2022)

Keywords:

government departnments, private sector, public-private partnership (PPP), insftastructure, public works

Abstract

The use of public-private partnerships (PPPs) for infrastructure development can alleviate the high levels of government debt associated with these projects while encouraging new investment as well. We developed a theoretical analysis of infrastructure projects and the applicability of PPPs. Next, we provided an empirical analysis based on statistics from the PPP database of the Ministry of Finance from 2013 to 2017. Based on our results, this paper offers reasonable and effective guidance for restructuring China’s PPP governance to improve the participation of government departments, the private sector, and the public in PPPs for infrastructure development.

References

Alonso-Conde, A. B., Brown, C., & Rojo-Suarez, J. (2007) Public private partnerships: Incentives, risk transfer and real options, Review of financial economics, 16(4), pp. 335-349.

Ball, R. (2011) Provision of public service infrastructure–the use of PPPs in the UK and Australia: A comparative study, International Journal of Public Sector Management.

Benkovic, S., Krivokapic, J., & Milosavljevic, M. (2015) Application of the public-private partnership organizational structure in the improvement of business operations of public sector enterprises in Serbia, Lex Localis – Journal of Local Self-Government, 13(3), pp. 397-417.

Brinkerhoff, D. W., & Brinkerhoff, J. M. (2011) Public–private partnerships: Perspectives on purposes, publicness, and good governance, Public administration and development, 31(1), pp. 2-14.

Buso, M., Marty, F., & Tran, P. T. (2017) Public-private partnerships from budget constraints: Looking for debt hiding?, International Journal of Industrial Organization, 51, pp. 56-84.

Chan, A. P., Lam, P. T., Chan, D. W., Cheung, E., & Ke, Y. (2010) Potential obstacles to successful implementation of public-private partnerships in Beijing and the Hong Kong special administrative region, Journal of Management in Engineering, 26(1), pp. 30-40.

Garvin, M. J. (2010) Enabling development of the transportation public-private partnership market in the United States, Journal of construction engineering and management, 136(4), pp. 402-411.

Georgievski, S. (2009) The new Macedonian Concessions and Public-Private Partnerships Act: A Need for Further Improvement?, Lex Localis – Journal of Local Self-Government, 7(2), pp. 159-175.

Iossa, E., & Martimort, D. (2012) Risk allocation and the costs and benefits of public‐‐private partnerships, The RAND Journal of Economics, 43(3), pp. 442-474.

Kateja, A. (2012) Building infrastructure: Private participation in emerging economies, Procedia-Social and Behavioral Sciences, 37, pp. 368-378.

Ke, Y., Wang, S., & Chan, A. P. (2010) Risk allocation in public-private partnership infrastructure projects: comparative study, Journal of infrastructure systems, 16(4), pp. 343-351.

Krishna, A. (2003) Partnerships between local governments and community‐based organisations: exploring the scope for synergy, Public Administration and Development: The International Journal of Management Research and Practice, 23(4), pp. 361-371.

Ke, Y., Wang, S., Chan, A. P., & Lam, P. T. (2010) Preferred risk allocation in China’s public–private partnership (PPP) projects, International Journal of Project Management, 28(5), pp. 482-492.

Liu, J., Gao, R., Cheah, C. Y. & Luo, J. (2016) Incentive mechanism for inhibiting investors' opportunistic behavior in PPP projects, International Journal of Project Management, 34(7), pp. 1102-1111.

Li, B., Akintoye, A., Edwards, P. J., & Hardcastle, C. (2005) The allocation of risk in PPP/PFI construction projects in the UK, International Journal of project management, 23(1), pp. 25-35.

Lu, W., Liu, A. M., Wang, H., & Wu, Z. (2013) Procurement innovation for public construction projects, Engineering, Construction and Architectural Management, 20(6), pp. 543-562.

Mota, J. A., & Moreira, A. C. (2015) The importance of non-financial determinants on public–private partnerships in Europe, International Journal of Project Management, 33(7), pp. 1563-1575.

Nijkamp, P., Van Der Burch, M., & Vindigni, G. (2002) A comparative institutional evaluation of public-private partnerships in Dutch urban land-use and revitalisation projects, Urban studies, 39(10), pp. 1865-1880.

Osei-Kyei, R., & Chan, A. P. (2015) Review of studies on the Critical Success Factors for Public–Private Partnership (PPP) projects from 1990 to 2013, International journal of project management, 33(6), pp. 1335-1346.

Peirson, G., & McBride, P. (1996) Public/private sector infrastructure arrangements, CPA communique, 73, pp. 1-4.

Romzek, B. S., & Johnston, J. M. (2005) State social services contracting: Exploring the determinants of effective contract accountability, Public Administration Review, 65(4), pp. 436-449.

Rebeiz, K. S. (2012) Public–private partnership risk factors in emerging countries: BOOT illustrative case study, Journal of Management in Engineering, 28(4), pp. 421-428.

Skietrys, E., Raipa, A., & Bartkus, E. V. (2008) Dimensions of the efficiency of public-private partnership, Engineering economics, 58(3), pp. 45-50.

Tan, J., & Zhao, J. Z. (2019) The rise of public–private partnerships in China: an effective financing approach for infrastructure investment?, Public Administration Review, 79(4), pp. 514-518.

Tserng, H. P., Russell, J. S., Hsu, C. W. & Lin, C. (2012) Analyzing the role of national PPP units in promoting PPPs: Using new institutional economics and a case study, Journal of construction engineering and management, 138(2), pp. 242-249.

Wang, Y., & Liu, J. (2015) Evaluation of the excess revenue sharing ratio in PPP projects using principal–agent models, International Journal of Project Management, 33(6), pp. 1317-1324.

Xu, Y., Chan, A. P., & Yeung, J. F. (2010) Developing a fuzzy risk allocation model for PPP projects in China, Journal of construction engineering and management, 136(8), pp. 894-903.

Zhang, S., Gao, Y., Feng, Z., & Sun, W. (2015) PPP application in infrastructure development in China: Institutional analysis and implications, International journal of project management, 33(3), pp. 497-509.

Published

2022-04-21

Issue

Section

Article