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​Eric Maskin: PPP Minimizes Errors for Government and Contractors

DATE: 2019-06-24


On April 27th, 2019, the Launch Ceremony of the Society for the Analysis of Government and Economics (SAGE) and the Inaugural Annual Conference of Government and Economics was held at the Mong Man Wai Concert Hall, Tsinghua University. Chen Xu, secretary of the CPC Committee of Tsinghua University and director of the School Affairs Committee, and Li Daokui, initiator and co-founding president of SAGE and president of ACCEPT addressed the conference respectively.

Eric Maskin, as the first speaker, took the mechanism of PPP (Public-Private Partnership) as the starting point, and exchanged his views on the relationship between government and market economy with the participants and the audience. Maskin said that the endogenous problems of the medical, health, taxation and even pharmaceutical industries could not be effectively solved through the market due to the massive investment, high risk and involvement of the service and provision of public goods. It requires the government and private enterprises with expertise to jointly develop and operate the projects. Maskin believes that the Chinese government can not be viewed as a single institution. In fact, contradictions also exist between the central government and local governments on certain specific issues. Local governments may opt for high-cost but eye-catching “face-job projects” in order to meet their performance requirements. However, through the PPP mechanism, the central government can share costs with local governments and contractors so as to exclude real high-cost projects, minimize errors and meet numerous policy goals.

Society for the Analysis of Government and Economics
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