In highway franchise, interest groups mainly include government, consumer and private enterprises. How to balance the benefit of different interest groups and find the equilibrium between the social welfare maximization and profit maximization of private enterprises is the key to the success of highway franchising. Owing to lack of concession legal system, now in China many regions followed a "privatize now, regulate later" approach, which brings more risks to each group and opportunistic behavior in the franchising process. Through analyzing current situation and the existing problems in Chinese highway franchising, we find that the operation of governments' power will have a direct effect on the protection of consumers' interest and the investment confidence of private and foreign capital. Then we draw a conclusion that a formal and operable concession law should be enacted as soon as possible to bring a real competition to the reform of highway management. What's more, the governments should establish a supervision consciousness and clarify the function for each department.
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