Research On Formation Mechanism And Prevention And Control Countermeasures Of Local Government Debt Under PPP Model

PPP model(public-private-partnership)is the Partnership model between government and social capital.Practice in all countries in the world has proved that the PPP model is conducive to easing financial pressure,improving the level of public services and promoting technological progress in public governance,especially in the field of public infrastructure construction.Since the state council advocated the PPP model in 2014,the implementation of the PPP model in China has made rapid progress and achieved obvious results.But with the further advance,there are still shortcomings.In particular,whether the PPP model will trigger financial risks,whether it will become a disguised debt of local governments and other issues are more and more conspicuous.Objectively speaking,the PPP model has these shortcomings.From a dynamic perspective,it not only affects the benefit distribution of participants,but also may form a new channel of government debt.Once it becomes a reality,it will violate the original intention of PPP mode.It may even induce the government credit risk,and then lead to the outbreak of systemic financial risk.Based on this,this paper intends to conduct an in-depth study on the formation mechanism and transmission process of local government debt under the PPP model,analyze the possibility and reality of local government debt caused by the PPP model,and finally put forward Suggestions on the standardized operation of the PPP model and the prevention and control of local debt.The thesis consists of six chapters.Chapter one introduction.This paper introduces the research background,research significance,research content,etc.Chapter two: the theoretical discrimination and theoretical basis of PPP model and local government debt.On the basis of identifying whether the fiscal expenditure responsibility of PPP model is local government debt,this part summarizes the relevant theories mainly covered in this study and explores the enlightenment and support of this study.Chapter three: the development status of PPP and local government debt in China.This part has two main contents: first,the operation status of PPP mode since 2014;Second,China’s local government debt status since 2014.Chapter four is the internal formation mechanism of PPP model on local government debt.This paper mainly explores the formation mechanism and path of PPP model on local government debt from three aspects.Chapter five the possibility of PPP model and the formation of local government debt: a case study based on Y city.This chapter takes Y city as an example to testthe possibility of whether PPP mode forms local government debt or not from a dynamic perspective.Chapter six conclusions and countermeasures.Here,on the basis of summarizing all the research conclusions,countermeasures and Suggestions are put forward.This paper finds that: first,under certain conditions,the government’s fiscal expenditure responsibility under PPP mode is not local government debt,but may be the source or cause of future debt.Second,information asymmetry between the PPP mode participation main body,especially as a public government cost information is not complete control of social capital,social capital party often use information advantage,inflated costs and increased government spending or raise prices consumers pay,will directly cause the government payments imbalances,form a real debt.Third,the cost of the PPP model is reimbursed by the tax of the taxpayer in the whole life cycle.Based on the income effect and substitution effect of tax,the current tax payment influences future investment and consumption,which is bound to have an impact on future economic growth.Once the cost sharing in PPP mode is out of balance,the marginal tax rate will be greater than the marginal cost growth rate of PPP projects,which will inevitably lead to the hidden trouble of borrowing.Fourth,we must choose a diversified financial capacity assessment system.It is not scientific to use the average growth rate of general public budget expenditure in previous years as the basis for calculating the local fiscal capacity of PPP projects in the whole life cycle.Once the economic environment and fiscal policy change,the government’s commitment to the social capital side is difficult to fulfill,forming contingent liabilities or various explicit government debts.Based on the research conclusion,this paper holds that while implementing the PPP model in a prudent and standardized manner,we should prevent the formation of new local government debts and prevent the outbreak of local financial risks or even systemic risks.The specific measures should include such measures as controlling the responsibility of government expenditure in PPP mode,strengthening the quality control of PPP projects,combining performance appraisal with debt control,and improving the evaluation standard of fiscal affordability.We should not only pay attention to its cost pressure on the financial capacity,but also pay attention to the economic capacity of the public.It is suggested to adopt a diversified evaluation index system.In addition to the index of general public budget expenditure,it is still necessary to add the indicators of the level of disposable financial resources,per capita net income,dynamic operating costs,etc.,and place them under the multiple constraints of the level of financial resources and the ability of residents to pay.This study is conducive to standardizing the healthy development of China’s PPP model and providing policy reference for local government debt management practices.Thecharacteristics and innovations of this paper are mainly reflected in the research perspective and research object.This paper holds that the operation of PPP model and the formation of government debt are both a dynamic process,extending and developing in their whole life cycle.This paper studies the relationship between PPP model and government debt,which is to grasp the law and find the strategy dynamically.Secondly,the comprehensiveness of the research object.Both government debt and PPP involve the government,the public and social capital.This paper insists on the comprehensive study of the three behavioral characteristics and game direction,and then discusses the internal mechanism between PPP model and local government debt.