Administration &Society, Ahead of Print.
How to explain the distortion of public–private partnerships (PPPs) is underexplored. Drawing on the principal–agent theory, this article proposes an institutional incentive-driven framework. Based on a case study of PPPs in China, this article finds that central–local government relationships play a crucial role in shaping PPP performance. Goal incongruence and information asymmetry lead to two types of distortion. First, PPPs become a political task for local governments to higher-level governments’ needs. Second, PPPs serve as financing tools to create political achievements. These opportunistic behaviors violate the goals of the central government’s PPP policy and increase government debt risks.