Research in Infrastructure Financial with Government Guarantees of Prestige Model

Financing of the infrastructure is always a focus and also it is difficult for the government, especially the local government which is not rich. In the processing of Infrastructure construction, the government´s guarantee plays an important role. Government may be charged with contingent expenses. Based on prestige model, the paper compare the government´s the behavior with and without the pressure of financial constraints. And the paper arrive at a conclusion that the government´s finance is very important to determine the government´s behavior.