Public–private partnership governance mechanism analysis using grounded theory

Governance mechanisms of public–private partnership (PPP) projects can alleviate opportunism behaviours and indirectly reduce transaction costs from the perspective of transaction cost economics. This paper analyses 40 PPP projects in 14 provinces and municipalities across China using the grounded theory and finds that the key attributes for contractual governance are risk sharing, procurement methods, rights allocation and financing mechanisms. The core mechanisms for relational governance are trust in competence, reputation, institutional trust and commitment-related trust. Applying this system in project governance helps enhance project performance.