Research On Government Regulation Mechanism Of PPP Project Based On Principal-Agent Theory

Along with the advancement of national urbanization process, the demand of public program increases gradually, its construction financing and operations management has given birth to development of the Public-Private-Partnership Model in our country. The introduction of private enterprises makes change of the government's role, and both sides form a Principal-Agent relationship, the tent towards interest of private enterprise is easy to cause the rent-seeking corruption, etc. Due to the application and development of the PPP Model is not yet mature in our country, market failure problems such as monopoly, marketing allocation failure of the resources and so on, which has occurred in the construction and operation of the project. To effectively promote the marketization of the urban infrastructure, therefore, guarantee the quality of the public service and public interests, which needs to establish a sound scientific Government Regulatory System of PPP projects.After a review of domestic and foreign research related to PPP Mode, in the perspective of the PPP Mode, based on the Principal-Agent theory, to build a Government Regulation System as the guidance, expand the study of Government Regulation Mechanism of the PPP project. Firstly, to summarize the related theories of PPP Model, Principal-Agent and Government Regulation, which be as the theoretical basis for building of the Government Regulatory System; Then using the mathematical derivation method of the Game Theory on the game analysis of Government Regulation and ownership structure in PPP projects; Finally, on the basis of regulatory principles and objectives of the government, combined with the game analysis, from three main aspects of supervision subject, supervision content and supervision pathway of PPP projects, improved the Government Regulation System of PPP projects. and based on this, with the examples of Beijing Metro Line 4, analyzed the Government Regulation of the Line 4 project, in order to provide experience for promoting application and development of the PPP Model in the field of public products in China.The result shows that: In the PPP Mode, the Principal-Agent relation between public and private is the contract relations of both risk-sharing and revenue-sharing, the conflict is the Information asymmetry and inconsistent with the objectives and interests. In this case, the government needs to take the incentive constraint mechanism to the private sector, which is to ensure the efficiency of the project, and the ways to take should reach certain incentive intensity. In this way, the most effective supervision can be realized. at the same time, both sides of the game equilibrium is essentially a balance of excitation intensity and risk sharing, whereby the rational allocation of the ownership structure can improve the execution efficiency of PPP project and efficient use of resources, which is to realize the effective supervision of government.