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An Empirical Study of Determinants of Pay-for-Performance in PPP Procurement

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  • Fuguo Cao

    (School of Law and School of Finance and Taxation, Central University of Finance and Economics, Chinese Academy of Governance for Public Private Partnerships, Beijing 100098, China)

  • Cong Wang

    (School of Finance and Taxation, Central University of Finance and Economics, Chinese Academy of Governance for Public Private Partnerships, Beijing 100098, China)

Abstract

Pay-for-performance is important in procuring Public–Private Partnership projects to which existing research has not paid enough attention. We took 884 ecological construction and environmental protection PPP projects (eco-environmental PPPs) as a sample and used the fuzzy-set qualitative comparative analysis method to discuss the links among technological, organizational, and environment in pay-for-performance procurement based on technology–organization–environment frameworks. We found the following: (1) A single condition alone does not constitute a necessary condition for the high-level pay-for-performance of PPP projects. The multiple concurrencies of technology, organization, and environmental conditions form three configurations that drive the pay-for-performance of PPPs with the same effect. (2) The existence of attention distribution and institutional regulation are crucial for optimizing pay-for-performance. To improve pay-for-performance, local governments should combine their own conditions to strengthen the synergy of technology, organization, and environmental conditions. In addition, the leader’s attention distribution and institutional regulation should be taken seriously. The contributions of this study are twofold: (1) Theoretically, this study provides new evidence of the determinants of pay-for-performance in PPP procurement, complementing empirical studies on the factors facilitating its implementation. (2) In practice, it provides a specific path for the government to improve the performance of eco-environmental PPPs.

Suggested Citation

  • Fuguo Cao & Cong Wang, 2022. "An Empirical Study of Determinants of Pay-for-Performance in PPP Procurement," Sustainability, MDPI, vol. 14(19), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:12738-:d:935159
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