Can Public–Private Partnership Wastewater Treatment Projects Help Reduce Urban Sewage Disposal? Empirical Evidence from 267 Cities in China

Human activities have placed enormous pressure on the world’s water resources. To improve the efficiency of water supply and wastewater treatment, public–private partnerships (PPPs) are widely used for sewage treatment. However, an academic question remains about whether PPP sewage treatment projects (PPPSTs) help reduce urban sewage disposal when responsibilities shift from the public sector to the private sector. This study used panel data of 267 prefecture-level cities in China from 2009 to 2020 to construct a difference-in-difference (DID) model based on the counterfactual framework to answer this question empirically. The model results significantly support the effect of PPPSTs on sewage disposal reduction. Furthermore, these results passed the parallel trend test and the placebo test, and the results were still achieved when the quadratic term of the core variable was introduced, indicating that the model is reliable. In addition, the moderating effect models were used to expand the analysis. That is, the regressions were derived by multiplying the relevant extended variables and the core independent variables. This analysis indicates that the operation mode of PPPST and the characteristics of national demonstration play an essential role in reducing the amount of urban sewage disposal. However, the effect of fiscal decentralization is not apparent. These conclusions were also confirmed in the model using the investment scale of PPPSTs. Therefore, paying attention to the formation of PPPST contracts and adopting a practical supervision system is of great significance for improving the effect of sewage disposal reduction.