How to Alleviate Rent-Seeking Behaviour in Performance Appraisal of Government-Paid PPP Projects? Tripartite Evolutionary Game Approach

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.

The Public Role for the Effectiveness of the Territorial Enhancement Initiatives: A Case Study on the Redevelopment of a Building in Disuse in an Italian Small Town

The present research is focalized on public-private partnership (PPP) procedures as a driving force of urban sustainable development. The paper intends to point out the relevant role played by the public administrations in the implementation of these mechanisms aimed at degraded urban area renovation, public property assets enhancement, or ex novo realization. In this sense, in the existing reference literature, the private investor tasks and risks have been often explored, neglecting the significant public entities position. The efficiency in the use of the PPP is verified through the discounted cash-flow analysis (DCFA) implementation: the assessment of the costs and the revenues derived from the project allows the private investor to verify the financial feasibility of the initiative. In the context outlined, the public administration could contribute to the success of the intervention through a periodic fee paid to the private investor in order to ensure the financial convenience of the project. In the present research, a functional reconversion operation related to a building located in the small town of Cesano Romano (Italy) and carried out through the PPP operational tool, has been illustrated. In the analysis, a public monetary amount has been considered and determined, able (i) to guarantee the financial sustainability for the private investor and (ii) to comply with the regulatory constraints in the Italian context. Finally, a scenario analysis has been developed to identify the situation/s in which public participation is necessary for the convenience of the initiative and to quantify this monetary amount.

THE ROLE OF DIGITAL TECHNOLOGIES IN THE FORMATION OF INCOME OF A PRIVATE INVESTOR: A COMPARATIVE GENERALIZED ASSESSMENT

Based on the main development trend of the modern securities market, which consists in its computerization, the introduction and widespread use of digital technologies, leading to the intertwining of the activities of all participants in the financial market, turning into a single financial mechanism, individual investment accounts are considered – a product of online integration -services and mobile applications. The general and distinctive features of the nature of the influence of operations carried out through individual investment accounts on the formation of income of a private investor from property are revealed. By identifying the nature of the correlation between the indicator of the investment activity of private investors in the Chechen Republic and their income from property, it was established that income from property using digital channels is mainly formed through the banking services market.

An Evolutionary Game Model on Public Participation in Public-Private Partnerships

Effective participation of the general public in public-private partnerships (PPPs) can coordinate the multidemands of stakeholders and improve the scientificity of decision-making on infrastructure and public utility projects. However, excessive public participation may aggravate the complexity of PPPs and delay the progress of developing PPP projects. Accordingly, the appropriate participation of the general public is essential in the implementation of PPPs. This study examines the boundary conditions and the effective thresholds of public participation in adjusting the cooperative behaviors of both the government and the private investor in PPPs through an analysis of the evolution paths and dynamic balances of the strategy choices between the two parties. The results indicate that public participation in PPPs has the particularity of adjusting the partnership between the two parties. The results also suggest that public participation is not always effective and there are differences in the degree of public participation in the various strategy behaviors in which the government and the private investor choose to cooperate.