A study on the factors influencing the success and failure of PPP projects in China-- Comparative Analysis Based on 30 cases

PPP is a partnership established by the government, social capital and it based on the principles of risk sharing and benefit sharing. Based on 30 typical case sets of PPP projects, this paper uses qualitative comparative analysis to explore the successful or failure influencing factors of PPP. There are seven paths for PPP success and path one and path two are typical paths. The feasibility gap subsidy makes up for the defects of government payment and user payment, and integrates the advantages of both, forming a diffusive and effective return mechanism. Based on complementary advantages, the cooperation between state-owned enterprises and foreign enterprises is conducive to the success of PPP projects. There are six paths to PPP project failure. A reasonable risk sharing framework is the basis to avoid PPP failure. Policy risk should be undertaken by the government, operational risk should be undertaken by the project company, and citizen opposition and uncertainty risk should be jointly undertaken by the project company and the government, thus forming a dynamic risk tracking mechanism and sustainable return mechanism. 1. Research Background and Literature Review PPP is a kind of public-private partnership, which is usually translated as the cooperation between government and social capital, absorbing social capital to enter the field of public service and public investment. So as to realize the "resource mutual assistance, risk sharing and benefit sharing" between government and enterprises in the field of PPP. Since 2010, PPP has developed rapidly in China, which has been widely used in transportation, municipal public utilities, comprehensive development, agriculture, forestry, water conservancy and environmental protection, social undertakings and other fields, and has made remarkable achievements. But at the same time, there are various problems, leading to the failure of some projects. What factors lead to the success of PPP project? What factors lead to the failure of PPP project? It is the core of the research. Scholars at home and abroad analyze this issue from different perspectives. From an academic perspective, management, public management and economics make multidimensional observations on PPP based on different disciplinary attributes. From the perspective of management, PPP research mainly focuses on contract management, risk management and collaborative management. Contract is the basis of PPP practice and management. In the process of practice, on the one hand, incomplete PPP contract is prone to cause limited rationality and post opportunism. On the other hand, too detailed terms of PPP contract and too many key performance indicators will also distract operators attention. Only by building full trust between partners can we effectively make up for the lack of supervision. Academic research methods and perspectives of PPP risk allocation are also constantly innovative, resulting in the perspective of fairness preference, information asymmetry, and through the construction of income and game model to allocate the PPP risk. From the perspective of public management, PPP research focuses on the main network, construction mechanism, regulatory mechanism and other aspects. In the process of PPP construction, clear rights and responsibilities, diversified financing, graded fund entry and exit, and 2020 International Conference on Social and Human Sciences (ICSHS2020) DOI: 10.38007/Proceedings.0000229 ISBN: 978-1-80052-000-4 1226 perfect income structure distribution mechanism can effectively improve the implementation effect of PPP. The government should take the institutional risk, fully mobilize the enthusiasm of all parties, design the quality evaluation system, and choose social capital cooperation properly. The final beneficiary of PPP project is the public. Public opinion should be fully absorbed in the project initiation, bidding, design, construction and operation stages to provide a good environment for the PPP project construction. From the perspective of economics, PPP research mainly focuses on reducing transaction costs, asset securitization, subject game and so on. Obert osei-kyei, based on the cross-border electronic questionnaire survey, found that simplified payment mechanism and continuous project monitoring are the most critical constitutional factors for the success of PPP project operation. Efficient service delivery, perfect legal structure, appropriate stakeholder management mechanism and good investment environment are also important. According to Wen Laicheng, the large-scale promotion of PPP is likely to cause financial risks. Therefore, we should effectively monitor financial risks, establish scientific and comprehensive financial risk supervision technology and methods for PPP projects, establish financial risk supervision business process and management system for PPP projects, and manage and control government financial risks through a public-private sharing mechanism with reasonable risks for PPP projects. Wang Jian bo proposed to build a new pattern of investment and financing system based on PPP mode, supplemented by the issuance of special bonds and the establishment of industrial funds. 2. Research Methods and Design of Influencing Factors 2.1 Case Set Selection The traditional case analysis in the limited cases to explore the interpretation and law, although in a certain space-time category can get a certain depth of conclusions, but the scope of application of the conclusions is relatively narrow, it lacks the depth and breadth. Quantitative research relies on large samples to get a general explanation, but there is a lack of depth and breadth . QCA method goes beyond the limitations of qualitative and quantitative research, and integrates the advantages of "qualitative" (case oriented) and "quantitative" (variable oriented) analysis methods. It not only focuses on a single causal model, but also pays attention to "multiple concurrent causal relationships" across cases . QCA is an appropriate method to explore the influencing factors of the implementation effect of PPP project. Firstly, 30 typical PPP cases are selected, including 15 successful and 15 failed ones. The cases are mainly from the government and social capital cooperation center of the Ministry of finance, chinanews.com and local government official website. The case set (as shown in Table 1) covers the economically developed areas and economically underdeveloped areas in space, and involves transportation, municipal public utilities, comprehensive development, ecological and environmental protection, and social undertakings in the project field. 2.2 Result Variable: Project Success and Project Failure There are two types of outcome variables: success and failure of PPP projects. PPP successful project means the successful completion, normal operation and good performance of the project. PPP failed projects include uncompleted construction, poor management, transfer management, contract abolition, unsustainable and in trouble . successful PPP project was assigned 1 and the failed one was assigned 0. 2.3 Conditional Variables: Four Types and Nine Factors What factors lead to the success and failure of PPP projects? Based on the preliminary analysis of case set, the influencing factors of PPP success or failure mainly include four types and nine factors. The four types are risk allocation, capital type, environmental support and return mechanism. 1.Category I: risk allocation