Institutional Environment, Institutional Arrangements, and Risk Identification and Allocation in Public–Private Partnerships: A Multilevel Model Analysis Based on Data from 31 Provinces in China.

As an important part of market-based reforms, the issue of "risk" has always been a part of the public–private partnership (PPP) debate, and the way in which risks are managed determines the sustainability of market-based reforms. This study systematically examines how the institutional environment and institutional arrangements affect the effectiveness of PPP risk identification and allocation. The study aims to establish a multi-source database of all publicized PPP projects in 31 provinces during the period of 2017–2021 in China, and it incorporates different levels of influencing factors, such as the institutional environment and institutional arrangements, into a framework. Through the application of a multilevel model, the impact of the political–institutional structure at the provincial level and institutional arrangements at the social capital and project levels on PPP risk identification and allocation is judged hierarchically. It is found that only social capital at the institutional environment level can directly and positively contribute to the effective identification and allocation of PPP risks, while both the degree of potential market competition and the degree of integration at the project level have a positive effect on its risk profile. In addition, there are cross-level moderating effects, with social capital, government transparency, and government–business relations positively improving risk allocation and identification through the degree of market competition, with no significant coordinating effect on the degree of contractual integration. This study goes beyond the existing one-dimensional risk profile analysis and risk typology to dismantle the "black box" of risk identification and allocation, which is a process of continuous negotiation, and to provide a sustainable governance mechanism for the market-oriented reform of public services in the institutional arena. [ABSTRACT FROM AUTHOR]