Abstract
Performance appraisal is a key link in the performance payment mechanism of government-paid Public-Private Partnership (PPP) projects. As the performance appraisal of PPP projects is highly professional and complex, it is usually necessary to introduce a third-party performance appraisal institution to evaluate the project outputs of the private investor. However, driven by economic rent, the private investor has the incentive to seek rent from the third party in the performance appraisal process, leading to the low overall performance level of PPP projects and the inability to achieve the PPP performance appraisal goal effectively. To explore how to avoid rent-seeking in performance appraisal and improve the overall performance of government-paid PPP projects, a tripartite evolutionary game model between the behaviour, third party, and the public sector has been constructed. Based on the evolutionary game model, this study analyses the evolutionary stability of each player's strategy, discusses the influence of various factors on the strategy selection of the three-party, and further analyses the stability of the equilibrium point of the three-party game system. The findings reveal that the public sector can slow down the rent-seeking behaviour of the private sector by setting up a reasonable reward and punishment mechanism. The design of a reasonable reward and punishment mechanism must meet the following conditions: (1) the sum of the reward and punishment of all parties is greater than the speculative income; (2) the amount of performance fee withheld for the private investor is greater than the difference between the project operating cost saved and the speculation cost. The research provides technical support for the design of the performance appraisal mechanism of government-paid PPP projects.
Highlights
Public-Private Partnership (PPP), compared with the traditional mode, has the advantages of reducing the public sector’s financial burden and improving the efficiency of public products and service supply and has been more and more widely used in various countries [1, 2]
This study focuses on the following three aspects for in-depth analysis: (1) Aiming at the rent-seeking behaviour in the PPP project performance appraisal process, this study introduces the public sector reward and punishment mechanism; constructs a tripartite evolutionary game model between the private investor, the third party, and the public sector; and analyses the stability of the strategy of the game parties and the influence of related factors on the strategy. (2) e study uses the Lyapunov indirect method to analyse the stability of the equilibrium points in the tripartite game system and get stable strategy combinations under various conditions. (3) e theoretical results are simulated and analysed using MATLAB R2017b, and countermeasures and suggestions related to the PPP project performance appraisal mechanism are put forward
PPP project performance appraisal is a dynamic game process, which can be considered a dynamic equilibrium through the previous analysis. erefore, this study focuses on rent-seeking behaviour in the performance appraisal process and introduces the performance appraisal mechanism of the public sectors, and a tripartite evolutionary game model between the private investor, the third party, the public sector has been constructed to discuss governance measures for rent-seeking behaviour in the performance appraisal process
Summary
Public-Private Partnership (PPP), compared with the traditional mode, has the advantages of reducing the public sector’s financial burden and improving the efficiency of public products and service supply and has been more and more widely used in various countries [1, 2]. Erefore, a reward-punishment mechanism is introduced in this paper to suppress the rent-seeking behaviours between the private sector and the third party in the performance appraisal of government-paid PPP projects. This study focuses on the following three aspects for in-depth analysis: (1) Aiming at the rent-seeking behaviour in the PPP project performance appraisal process, this study introduces the public sector reward and punishment mechanism; constructs a tripartite evolutionary game model between the private investor, the third party, and the public sector; and analyses the stability of the strategy of the game parties and the influence of related factors on the strategy. Rare attention was paid to introducing government reward and punishment mechanisms to govern rent-seeking behaviour in the performance appraisal of government-paid PPP projects
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