Study On Influence Of Fiscal Decentralization To Pollution And Green Economic Growth

Since the Chinese government adopted the policy of reform and opening-up,our economy developed rapidly for many years,known as the miracle of economic growth,attracted the attention of the world.Extensive economic growth mode has not only brought the miracle of economic growth,but also brought the environmental pollution problem.―High growth,high pollution‖ seems to become China’s economic growth model,this phenomenon is related to the government’s behavior under the Chinese fiscal decentralization system.Fiscal decentralization refers to the central government gives local governments a certain amount of tax power and spending power,and allow local governments independently determine the size and structure of their budgetary revenues and expenditures.The essence of Chinese fiscal decentralization is political centralization and economic decentralization,in the performance evaluation mechanism of which GDP is the main Index,fiscal decentralization policy has greatly stimulated the enthusiasm of local governments for economic growth,local government has launched the GDP competition for the promotion;However,the government competition distorts the government behavior,while promoting economic growth,but also bring environmental pollution.Under the emphasis on sustainable development as today,we are no longer concerned only with the speed of economic growth,but also on the quality of the environment and the quality of economic growth.Firstly,based on the provincial panel data,this paper constructs a comprehensive index of environmental pollution based on entropy weight method,analyzes the influence of fiscal decentralization and government competition on environmental pollution.The results show that although fiscal decentralization contributes to the improvement of the environment,under the influence of government competition,the impact of fiscal decentralization on environmental pollution will be changed by the government competition: the government competition will cause the distortion of the government behavior.In pursuit of economic growth,local governments tend to lower the environmental threshold to attract foreign investment,sacrifice the environment in exchange for temporary economic gain,while they invest their money in the field which can bring benefits in short term instead of controlling environmental pollution.This behavior will lead to the soft constraints of environmental regulations,the effect of fiscal decentralization on the environment will be weakened.Next,we used game theory to analyze the behavior choice between the governments,aim to find out the way to solve the competition between governments.Finally,according to unit pollution output principle,we used GDP and comprehensive environmental pollution index to synthesize the green GDP,studied the influence of fiscal decentralization on green economic growth.The results show that fiscal decentralization contributes to green economic growth,but in the background of the government competition,with the entry of FDI,the beneficial effect of fiscal decentralization on green economic growth has been weakened while improving the level of economic growth.Thus,in order to improve the environment and raise green economic development level,we must implement fiscal decentralization and change the vicious competition among governments at the same time.In conclusion,we believe that reforming the existing performance appraisal system based on ―GDP‖ is an effective way to solve the problem of government behavior distortion.We suggest that we should put green GDP into local government performance evaluation system and link it with the official promotion mechanism,in this way we can correct the distortion of government behavior and promote the sustainable development of economy.In addition,reasonably dividing the financial power between the central government and local governments and deepening the reform of the financial system is imperative.