Incentive mechanism of rural environmental governance based on a public–private partnership (PPP) model

Abstract Rural environmental governance is the core link of rural revitalization. However, in practice, this model faces problems, such as a shortage of funds, unclear rights and responsibilities, and insufficient motivation. Therefore, by introducing a public–private partnership (PPP) model and based on principal-agent theory, this paper explores how to effectively design an incentive mechanism that will promote rural environmental governance. Firstly, a principal-agent incentive contract model is established, based on the PPP model, in which local governments are the principals and private enterprises are the agents. The analysis results show that, by reducing the risk aversion degree of private enterprises and improving their marginal output benefit coefficient, the investment intensity and effort level in environmental governance can be significantly enhanced. Secondly, in order to incorporate the participation of rural residents, the original model is expanded, and a PPP model principal-agent incentive contract model covering local governments, private enterprises, and rural residents is constructed. The analysis of this model shows that, compared with the non-cooperative model, the environmental governance model with the collaborative participation of local governments and rural residents is superior. Under the cooperative framework jointly constructed by local governments and rural residents, the enthusiasm of private enterprises to participate in environmental governance can be significantly improved by reducing the uncertainty of the external environment, alleviating the risk aversion degree of private enterprises, reducing the cost of environmental governance, and enhancing the overall efficiency of environmental governance. The research conclusions can provide scientific decision-making references for local governments when promoting rural environmental governance by applying the PPP model.