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This effect can be rectified by the government conducting a publicity campaign.

Is this a grammatical structure? the government is the subject, so what is "conducting a publicity campaign"? I guess the whole phrase after "by" is a noun phrase, isn't it? If not what is this structure called?

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"the government conducting a publicity campaign" is an action that the government might take, which the speaker suggests would rectify the effect (presumably detailed in an earlier sentence). the word "conducting" is a verb form here, and so this is a verb phrase, as it should be because it describes an action. "a publicity campaign" is a noun phrase, it is the the object of "conducting" while "the government" is the subject of "conducting".

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