Research on the Principal–Agent Mechanism of Poverty Alleviation through Mandarin Popularization in Ethnic Minority Areas from the Perspective of Ability Incentive

Abstract

In the process of poverty alleviation through Mandarin popularization in ethnic minority areas, there is a principal–agent relationship. In order to effectively stimulate the endogenous motivation of the public, it is necessary to study the principal–agent relationship between the local government and ethnic minorities in the process of poverty alleviation through Mandarin popularization from the perspective of ability incentive. Combining the traditional targeted poverty alleviation with principal–agent theory, this paper clarifies the principal–agent relationship between the local government, as principal, and the ethnic minorities, as agent, and constructs a principal–agent model based on information asymmetry scenarios. This model includes two scenarios: (1) the local government provides ability incentive; and (2) the local government does not provide ability incentive. Under the scenarios, the local government is risk-neutral, and the ethnic minorities are risk-averse. This paper focuses on analyzing the impact of ability incentives on the decision-making strategies of the local government and the public as well as on their expected revenue. Finally, the rationality and effectiveness of this model are verified through numerical simulation.

Keywords

• poverty alleviation through Mandarin popularization
• principal–agent
• information asymmetry
• incentive mechanism