Research on the Cooperation Optimization of Public-Private Partnership Based on Principal-Agent Theory

Recent years have witnessed an obvious increase in cooperation between the public and private sectors for the development and operation of infrastructure for a wide range of economic activities. Public-private partnership (PPP) provides an alternative way of involving the private sector in the delivery of public services. PPP is not only a financing pattern in the area of government investment, but also an effective project management mode in which public and private sectors could develop infrastructure and share risks, costs and resources jointly. In this paper, a principal-agent mode between public and private sectors is presented. Based on the mode, suggestions on how to optimize cooperation between public and private sectors are also pointed out.