A Research On The Effects Of Fiscal Decentralization On Environmental Pollution Of China

Since the reform and opening up,China's economy has been growing at a high speed.However,the environment has been seriously damaged.In 2018,the work report of government was firstly proposed that we should focus on preventing and resolving major risks,alleviating poverty accurately,and preventing pollution,which means the issue of environmental pollution has been placed on a new historical level.The research on the causes of environmental pollution in China mainly focuses on the economic growth pattern and industrial structure,however,the institutional factors are also the important causes of environmental pollution.In recent years,some scholars begin to pay close attention to the relationship between fiscal decentralization and pollution of the environment,the research that fiscal decentralization has driven to the pollution of the environment.The Chinese fiscal decentralization system is accompanied with the political centralization of the GDP evaluation standard,which brings incentive effect to the local government and promotes the economic growth.However,the excitation of fiscal revenue and political promotion by fiscal decentralization make local governments,especially the economic underdeveloped regions' local governments have a strong motivation for economic development,in the process of economic construction,local government relaxed environment regulation in order to pursuing economic benefits,the government's environmental protection goals tend to be ignored.Based on this,this paper analyzes the incentive distortion of fiscal decentralization on local government behavior,and explains the environmental pollution problem in China.Based on the typical facts between fiscal decentralization and environmental pollution,this paper explores the influence mechanism of Chinese decentralization on environmental pollution,and constructs a theoretical model of fiscal decentralization affecting environmental pollution.On this basis,we select panel data of 30 provinces in China from 1998 to 2015 years,using fixed effect and GMM estimation method toempirically analysis the effect of fiscal decentralization on environmental pollution,and to explore local government behavior differences under the background of the separation between agricultural province and non-agricultural province,then make the different degrees of influence on environmental pollution.The study found that: First,across the country,there is an inverted U-shaped curve between fiscal decentralization and environmental pollution.Second,the regional empirical results show that the agricultural provinces fiscal decentralization coefficient is significantly higher than the non-agricultural provinces.So in the agricultural provinces,local governments are more likely to adopt "race to bottom",resulting in a greater impact of fiscal decentralization on environmental pollution.Third,on the level of control variables,the industrial structure,population density,opening degree and urbanization level have different impacts on environmental pollution.The research results give us a more comprehensive understanding of the fiscal decentralization system and provide some reference for the environmental protecting control in China.In view of the above conclusions,we propose the following suggestions: First,we should improve the relevant incentive compatibility mechanism,improve the level of local government income,and guide the local government to protect the environment while developing the economy.Second,regional differences should be taken into account in the implementation of the policy,and greater efforts should be made to improve the transfer of agricultural provinces,providing policy preferences and guidance.Third,The choice of the mode of local economic development should consider the economic base and resource endowment of the region,and not blindly develop the industrial economy in order to improve the economic level.Fourth,the central government should change the standard of GDP assessment for local government officials,and put green economic development indicators and public service quality indicators into the standard of performance appraisal.