Abstract: The essence of the dilemma of PPP projects is a state of unbalanced interests. The unique function of law is to balance different interests of PPP projects. The legal incentive mechanism of public-private partnership should also be based on cost-benefit balance, and introducing the paradigm of law and economics as the model of system optimization and analysis evaluation. The incentive mechanism of law in PPP can be formed as a ternary structure of Incentive Object, Incentive Direction and Incentive Quantitativeness, helping to review and shape the effectiveness of the legal incentive mechanism in public-private partnership. It mainly contains seven parts: optimizing the competitive environment, establishing gradient for market access, improving information disclosure, reasonable profit promise, sharing and exporting risk, financial and taxation support and differentiation of the legal application.

Key words: Public-Private Partnerships, PPP projects, the incentive mechanism of law, analysis of law and economics, the balance of interests