Research On The Impact Of Fiscal Expenditure Competition Of Local Governments Under The Decentralized System On Environmental Quality

Since the reform and opening up,with the rapid advancement of industrialization,China's economic growth has achieved remarkable achievements that have attracted worldwide attention.But along with the sustained and rapid economic growth,the environmental quality is worsening.According to the "China Environment State Bulletin 2016" issued by the Ministry of Environmental Protection,in China's three hundred and thirty-eight cities,the air pollutants of two hundred and fifty-four cities had exceeded the standard,which accounting for 75.1%;among the six thousand one hundred and twenty-four quality monitoring sites of the groundwater,the monitoring stations with poor water quality and extremely poor quality accounts for 45.4% and 14.7%,respectively.Although the central government has repeatedly stressed that we must insist on the development path which is environmentally friendly,resource-conserving and sustainable,and the environmental quality has indeed improved in recent years,but the above data shows that the current situation of China's environmental pollution is still very serious.There are many factors contributing to the environmental pollution.The existing literature has mainly studied environmental pollution problems based on economic growth,FDI,and urbanization.However,the public property of the environment determines that the government plays an extremely important role in the quality of the environment.And under the governance model of “political centralization and fiscal decentralization” with Chinese characteristics,the behavior of local governments,especially the behavior of the fiscal expenditure among local governments,is more of an effect on environmental quality.Therefore,it is very necessary to thoroughly analyze the impact of the fiscal expenditure competition among local governments under the decentralized system on the environmental quality.Firstly,under the background of the Chinese fiscal decentralization system,we constructs a simple game competition model between local governments,which theoretically elaborates the inner logic of the behavior of local governments under the decentralized system that based on the principle of “competition for growth” affecting environmental quality.Then,we construct a model to analyze the effect of competition among local governments on the expenditure for economic construction and public service on environmental quality,and using the Chinese provincial panel data from 1994 to 2015 to test it empirically.And then,according to the level of economic and social development,our country is divided into three different regions: the eastern,central and western regions.And we analyze the regional heterogeneity of the government fiscal expenditure competition effecting natural environment.The research conclusion shows that the competition in economic construction expenditures has a reversed inhibitory effect on environmental quality,while the competition in public service expenditures is conducive to the improvement of environmental quality.On the one hand,in recent years,due to the fact mainly that the central government has repeatedly reiterated that promoting coordinated development of the economy and society,thus the local government competition gradually from "competition for growth" to "competition for harmony",therefore,the environmental quality has shown continuous improvement overall.One the other hand,Fiscal expenditure competition in developed regions is dominated by competition in public service expenditures.While in developing regions it is still dominated by economic construction expenditures.And the quality of the environment in the two regions is also very different.For the above problem,we think from the perspective of the government's institutional we should do the following.Firstly,Deepening reform of fiscal decentralization system and increasing the fiscal transfer payment for environmental protection,establishing a reasonable and fair compensation system for environmental governance are also useful to enhance the rationality of the decentralized system.Secondly,we must establish a quality-oriented performance evaluation system.And then,we must also promote the coordinated development between different provinces,and change the mode of economic development to achieve the transformation and upgrading of the industrial structure.Finally,on the basis of strengthening the authority of a specialized environmental management agency,we can adopt an environmental governance system combining territorial management and vertical management.