Latest research

“The Relationship between PPP and Government Franchise and Corresponding Legislative Strategies”, Public Finance Research, 2016 (6): 78-85.




As exotic concepts, PPP and government franchise originated from different countries and law systems, so they are bound to have different interpretationswhen brought into China. The incertitude of the words is one reason, but the more important reason lies in the different understandingson these two concepts by different countries and law systems.

In the Anglo-American Legal System represented by the United States and Britain,PPP is the strategic direction of the new public management reform. PPP comprises government franchise, in other words, government franchiseof any level is a form of PPP. In the Continental Law System represented by France and Germany, administrative law is relatively developed. The existing administrative contracts, court systems and corresponding institutions are well-established and the boundaries between the public and private are quite clear. Due to the mature legal system, administrative contracts are widely used among public sectors, and between public and private sectors.As a result, government franchise has become a mature management model of infrastructure.

In spite of the different origins of PPP and government franchise, their connotations have muchin common. The acceleration of globalization determines that they will integrate into each other. Although PPP and government franchise were produced in different cultural contexts, they have similar contents. Under the influence of globalization, they have shown an increasing tendency to learn from each other and integrate into each other. In addition to the amalgamation of legal language and legislative techniques, PPP and government franchise are moving forward gradual unification.

Based on the existing system, one feasible legislative strategy for PPP and government franchise in China is to make an overall plan and implement it step by step under the guidance of a top-down design, at the same time, conduct legislation in some pilot areas or sectors referring to the successful modes of “policy experiment” and then make laws nationwide when conditions are ready. If the purpose is the legislation of specific area or specific instrument (e.g. government franchise legislation), it should be realized in the form ofrules, while if the purpose is the legislation of multi areas or particular sort of instrument, it should be realizedin the form of national administrative laws. In the short term, options can be Provisions for Government Franchise Management or Regulations onthe Cooperationbetween the Government and Social Capital by the State Council, involving concerns of such departments as National Development and Reform Commission and Ministry of Finance. In the long term, laws like Public Resources Exchange Law, Public Sector Contract Law and Law of the Cooperation between the Government and Social Capitaletc. should be made by the NPC Standing Committee to enhance the authority of PPP and government franchise legislations.