IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i15p6674-d1449786.html
   My bibliography  Save this article

Institutional Environment, Institutional Arrangements, and Risk Identification and Allocation in Public–Private Partnerships: A Multilevel Model Analysis Based on Data from 31 Provinces in China

Author

Listed:
  • Lei Yang

    (Department of Public Administration, Huazhong University of Science and Technology, Wuhan 430074, China)

  • Longji Hu

    (Department of Policy Science, Central China Normal University, Wuhan 430079, China)

  • Yifan Li

    (Department of Political Science, Sun Yat-sen University, Guangzhou 510275, China)

Abstract

As an important part of market-based reforms, the issue of “risk” has always been a part of the public–private partnership (PPP) debate, and the way in which risks are managed determines the sustainability of market-based reforms. This study systematically examines how the institutional environment and institutional arrangements affect the effectiveness of PPP risk identification and allocation. The study aims to establish a multi-source database of all publicized PPP projects in 31 provinces during the period of 2017–2021 in China, and it incorporates different levels of influencing factors, such as the institutional environment and institutional arrangements, into a framework. Through the application of a multilevel model, the impact of the political–institutional structure at the provincial level and institutional arrangements at the social capital and project levels on PPP risk identification and allocation is judged hierarchically. It is found that only social capital at the institutional environment level can directly and positively contribute to the effective identification and allocation of PPP risks, while both the degree of potential market competition and the degree of integration at the project level have a positive effect on its risk profile. In addition, there are cross-level moderating effects, with social capital, government transparency, and government–business relations positively improving risk allocation and identification through the degree of market competition, with no significant coordinating effect on the degree of contractual integration. This study goes beyond the existing one-dimensional risk profile analysis and risk typology to dismantle the “black box” of risk identification and allocation, which is a process of continuous negotiation, and to provide a sustainable governance mechanism for the market-oriented reform of public services in the institutional arena.

Suggested Citation

  • Lei Yang & Longji Hu & Yifan Li, 2024. "Institutional Environment, Institutional Arrangements, and Risk Identification and Allocation in Public–Private Partnerships: A Multilevel Model Analysis Based on Data from 31 Provinces in China," Sustainability, MDPI, vol. 16(15), pages 1-28, August.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:15:p:6674-:d:1449786
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/15/6674/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/15/6674/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhirong Jerry Zhao & Guocan Su & Dan Li, 2018. "The rise of public-private partnerships in China," Journal of Chinese Governance, Taylor & Francis Journals, vol. 3(2), pages 158-176, April.
    2. Dmitri Vinogradov & Elena Shadrina, 2018. "Public-Private Partnerships as Collaborative Projects: Testing the Theory on Cases from EU and Russia," International Journal of Public Administration, Taylor & Francis Journals, vol. 41(5-6), pages 446-459, April.
    3. Erik Hans Klijn & Joop Koppenjan, 2016. "The impact of contract characteristics on the performance of public–private partnerships (PPPs)," Public Money & Management, Taylor & Francis Journals, vol. 36(6), pages 455-462, September.
    4. Erik-Hans Klijn & Geert R. Teisman, 2003. "Institutional and Strategic Barriers to Public—Private Partnership: An Analysis of Dutch Cases," Public Money & Management, Taylor & Francis Journals, vol. 23(3), pages 137-146, July.
    5. repec:bla:ecopol:v:14:y:2002:p:41-63 is not listed on IDEAS
    6. Xiao-Hua Jin & Hemanta Doloi, 2008. "Interpreting risk allocation mechanism in public-private partnership projects: an empirical study in a transaction cost economics perspective," Construction Management and Economics, Taylor & Francis Journals, vol. 26(7), pages 707-721.
    7. ., 2022. "Introduction to The Institutional Context of Public–Private Partnerships," Chapters, in: The Institutional Context of Public–Private Partnerships, chapter 1, pages 1-20, Edward Elgar Publishing.
    8. Estache, Antonio & Gonzalez, Marianela & Trujillo, Lourdes, 2002. "Efficiency Gains from Port Reform and the Potential for Yardstick Competition: Lessons from Mexico," World Development, Elsevier, vol. 30(4), pages 545-560, April.
    9. Federica Farneti & David W. Young, 2008. "A contingency approach to managing outsourcing risk in municipalities," Public Management Review, Taylor & Francis Journals, vol. 10(1), pages 89-99, January.
    10. Huanming Wang & Wei Xiong & Guangdong Wu & Dajian Zhu, 2018. "Public–private partnership in Public Administration discipline: a literature review," Public Management Review, Taylor & Francis Journals, vol. 20(2), pages 293-316, February.
    11. Deborah de Lange, 2023. "Sustainable Transportation for the Climate: How Do Transportation Firms Engage in Cooperative Public-Private Partnerships?," Sustainability, MDPI, vol. 15(11), pages 1-21, May.
    12. Carter B. Casady & Kent Eriksson & Raymond E. Levitt & W. Richard Scott, 2020. "(Re)defining public-private partnerships (PPPs) in the new public governance (NPG) paradigm: an institutional maturity perspective," Public Management Review, Taylor & Francis Journals, vol. 22(2), pages 161-183, February.
    13. Maskin, Eric & Tirole, Jean, 2008. "Public-private partnerships and government spending limits," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 412-420, March.
    14. Si Ying Tan & Araz Taeihagh, 2020. "Smart City Governance in Developing Countries: A Systematic Literature Review," Sustainability, MDPI, vol. 12(3), pages 1-29, January.
    15. Marta Marsilio & Giulia Cappellaro & Corrado Cuccurullo, 2011. "The Intellectual Structure Of Research Into PPPs," Public Management Review, Taylor & Francis Journals, vol. 13(6), pages 763-782, September.
    16. David Stasavage, 2002. "Private Investment and Political Institutions," Economics and Politics, Wiley Blackwell, vol. 14(1), pages 41-63.
    17. Samuel Carpintero & Ole Helby Petersen, 2016. "Public–private partnerships (PPPs) in local services: risk-sharing and private delivery of water services in Spain," Local Government Studies, Taylor & Francis Journals, vol. 42(6), pages 958-979, November.
    18. Trevor L. Brown & Matthew Potoski, 2003. "Managing contract performance: A transaction costs approach," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(2), pages 275-297.
    19. Rob Ball & Maryanne Heafey & David King, 2003. "Risk transfer and value for money in PFI projects," Public Management Review, Taylor & Francis Journals, vol. 5(2), pages 279-290, June.
    20. repec:bla:pmomgt:v:23:y:2003:i:3:p:137-146 is not listed on IDEAS
    21. Rob Ball & Maryanne Heafey & Dave King, 2007. "The Private Finance Initiative in the UK," Public Management Review, Taylor & Francis Journals, vol. 9(2), pages 289-310, June.
    22. Bertrand V. Quelin & Sandro Cabral & Sergio Lazzarini & Ilze Kivleniece, 2019. "The Private Scope in Public–Private Collaborations: An Institutional and Capability-Based Perspective," Organization Science, INFORMS, vol. 30(4), pages 831-846, July.
    23. Hans Van Ham & Joop Koppenjan, 2001. "BUILDING PUBLIC-PRIVATE PARTNERSHIPS: Assessing and managing risks in port development," Public Management Review, Taylor & Francis Journals, vol. 3(4), pages 593-616, December.
    24. Raden Murwantara Soecipto & Koen Verhoest, 2018. "Contract stability in European road infrastructure PPPs: how does governmental PPP support contribute to preventing contract renegotiation?," Public Management Review, Taylor & Francis Journals, vol. 20(8), pages 1145-1164, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jing Zhao & Wei Wang, 2024. "Impact of Tax Reductions on Public–Private Partnership Projects: Evidence from Comprehensive Implementation of China’s Business Tax to Value-Added Tax Reform," Sustainability, MDPI, vol. 17(1), pages 1-22, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiangang Shi & Kaifeng Duan & Guangdong Wu & Rui Zhang & Xiaowei Feng, 2020. "Comprehensive metrological and content analysis of the public–private partnerships (PPPs) research field: a new bibliometric journey," Scientometrics, Springer;Akadémiai Kiadó, vol. 124(3), pages 2145-2184, September.
    2. Dan Pan & Huan Chen & Guzhen Zhou & Fanbin Kong, 2020. "Determinants of Public-Private Partnership Adoption in Solid Waste Management in Rural China," IJERPH, MDPI, vol. 17(15), pages 1-14, July.
    3. Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Anatomy of Public-Private Partnerships : Their Creation, Financing, and Renegotiations," Discussion Paper 2014-017, Tilburg University, Center for Economic Research.
    4. Veiko LEMBER & Ole Helby PETERSEN & Walter SCHERRER & Robert ÅGREN, 2019. "Understanding The Relationship Between Infrastructure Public‒Private Partnerships And Innovation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(2), pages 371-391, June.
    5. Miranda Sarmento, J.J. & Renneboog, Luc, 2016. "Anatomy of public-private partnerships : Creation, financing, and renegotiations," Other publications TiSEM dc944be7-8594-4439-90da-6, Tilburg University, School of Economics and Management.
    6. Mai, Nhat Chi, 2016. "A Development Process of PPP Scheme for Infrastructure Projects in Vietnam," OSF Preprints g3e4u, Center for Open Science.
    7. Luo, Lanlan & Zou, Ziran & Chen, Shou, 2021. "Discounting for public-private partnership projects in China," Economic Modelling, Elsevier, vol. 98(C), pages 218-226.
    8. Nizkorodov, Evgenia, 2021. "Evaluating risk allocation and project impacts of sustainability-oriented water public–private partnerships in Southern California: A comparative case analysis," World Development, Elsevier, vol. 140(C).
    9. Sergi Saurí & Francesc Robusté, 2012. "Promoting Incentives: Performance Improvement in Container Port Terminals," Transportation Science, INFORMS, vol. 46(2), pages 233-246, May.
    10. Joshua Steinfeld & Ron Carlee & Kouliga Koala, 2020. "DBFOM Contracting and Public Stewardship in the Norfolk-Portsmouth Elizabeth River Tunnels Public-Private Partnership," Public Organization Review, Springer, vol. 20(1), pages 37-62, March.
    11. Rachael Nsasira & Benon C. Basheka & Pross. N. Oluka, 2013. "Public Private Partnerships (PPPs) and Enhanced Service Delivery in Uganda: Implications from the Energy Sector," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 4(3), pages 48-60, May.
    12. Cao, Fuguo & Li, Runyu & Guo, Shaobo, 2024. "Rhetoric and reality of public-private partnerships in China: A sustainable public procurement perspective," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    13. Roehrich, Jens K. & Lewis, Michael A. & George, Gerard, 2014. "Are public–private partnerships a healthy option? A systematic literature review," Social Science & Medicine, Elsevier, vol. 113(C), pages 110-119.
    14. Yingying Ma & Zhuojun Liu & Shuguang Shen, 2020. "Public-Private or Master-Servant? Examining the Implementation of the Serious Disease Insurance Scheme in China," IJERPH, MDPI, vol. 17(5), pages 1-15, February.
    15. Bo Zhang & Li Zhang & Jing Wu & Shouqing Wang, 2019. "Factors Affecting Local Governments’ Public–Private Partnership Adoption in Urban China," Sustainability, MDPI, vol. 11(23), pages 1-14, December.
    16. Nannan Wang & Minxun Ma, 2021. "Public–private partnership as a tool for sustainable development – What literatures say?," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 243-258, January.
    17. Cepparulo, Alessandra & Eusepi, Giuseppe & Giuriato, Luisa, 2020. "Public finances and Public Private Partnerships in the European Union," MPRA Paper 103918, University Library of Munich, Germany.
    18. David Baxter & Carter B. Casady, 2020. "Proactive and Strategic Healthcare Public-Private Partnerships (PPPs) in the Coronavirus (Covid-19) Epoch," Sustainability, MDPI, vol. 12(12), pages 1-8, June.
    19. Iram Khan & Asad Ghalib & Farhad Hossain, 2015. "Stakeholders Involvement or Public Subsidy of Private Interests? Appraising the Case of Public Private Partnerships in Pakistan," Public Organization Review, Springer, vol. 15(2), pages 281-296, June.
    20. Kopańska, Agnieszka & Osinski, Roman & Korbus, Bartosz, 2024. "Private entities motivations to participate in public-private partnerships," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:15:p:6674-:d:1449786. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.