Local Government Environmental Pollution Control Mechanism Under The Perspective Of Fiscal Decentralization:basic Logic And Strategic Behavior

Forty years since the reform and opening up,China has achieved rapid economic growth.However,with the rapid advancement of industrialization and urbanization,environmental pollution has become increasingly serious.The contradiction between development and resources has inevitably become the paradox of social transformation.On the one hand,in international affairs,China has been actively fulfilling its energy conservation and emission reduction obligations as a responsible great power;on the other hand,in the domestic economic environment,downward pressure has prompted structural transformation,and de-capacity has become the key to the macroeconomic stability.In this situation,the overall pressure on pollution reduction and pollution faced by whole society has expanded.Today,pollution prevention and control as one of the three critical battles proposed by the central government is in full swing.The scientific research surrounding it involves many disciplines.From the perspective of economic system,the relationship between fiscal and taxation systems and environmental pollution must be considered.With the gradual advancement of China’s administrative system reform,the actual situation-oriented departmental restructuring and power allocation have become more prominent.Under the background of fiscal decentralization system,this paper takes this as an opportunity to study local environmental pollution control mechanisms,taking the basic logic and strategic behavior of the local government’s environmental policy as the breakthrough point.First of all,this paper starts from the past literature and finds that in the field of environmental protection and decentralization,the existing research focuses on the study of one-way regulation and governance power concentration,or the influence of fiscal decentralization through the transmission of intermediate variables,which lakes understanding of the decomposition of the system.In the study of the impact of energy conservation and environmental protection expenditure on ecological environment protection,more discussions are made on how to improve the efficiency of capital use by improving the management of energy conservation and environmental expenditures,and the impact of energy conservation and environmental protection expenditure on green development is lacking.In understanding the pollution spillovers,the importance of geospatial space in environmental issues has been confirmed by many scholars.The “race to the bottom” competition of local governments has also been revealed and criticized by many scholars.However,most studies have remained at the qualitative stage.The "free rider" phenomenon under the special system in China lacks theoretical basis and quantitative evidence.Then,this paper takes the two important characteristics of the partial decentralization system(fiscal decentralization factor and political centralization factor)as the anchor point,and theoretically explores the impact of the two on pollution quantity,which is the basic behavioral logic of local government’s control of environmental pollution.The study finds that the increase of fiscal decentralization will prompt enterprises to reduce pollution automatically in the process of pursuing profit maximization,and have a positive impact on improving environmental quality.The political system of central appointment will make the government’s policies and corresponding expenditures deviate from the effect and proportion of expenditures expected by local residents that have led to inefficient allocation of financial resources,which is not conducive to the improvement of environmental quality.Afterwards,based on the previous part of the study,this paper considers whether the objective function between the central and local governments and the performance competition formed between local governments will form the local government’s strategic behavior from the perspective of vertical incentives and horizontal competition.On the one hand,in the vertical central and local agency relationship,this paper is based on the maximization of social welfare pursued by the central government,and the financial return function as the connection mechanism between the central and local,indicating that this kind of system design will be more emphasis on economic growth as local economic benefits grow,resulting in distortion of the policy intention.On the other hand,in the horizontal competition,the pollution function with the pollution standard as the independent variable and the local performance function composed of the sales and profits of the enterprise reflect the local government objectives,and the imitation behavior of the local government may appear in the process of chasing the target.Hereafter,this paper uses the data of the provinces from 1998 to 2016,with fiscal decentralization as the core variable,establishes the common panel and space panel model,and empirically studies the impact of fiscal decentralization and political centralization on regional pollution,and designs different Explain variable indicators to measure the behavioral logic of local governments.Subsequently,through the above research,the paper draws a series of conclusions: First,the more financial resources the local government has,the stronger the ability to reduce energy consumption.However,the increase in the level of fiscal decentralization has little impact on the overall environmental quality and air pollution level.The centralization factor represented by personnel transfer in politics will reduce energy efficiency and environmental pollution,but whether this reduction is consistent with the expectations of local residents requires more samples and evidence to support it;Second,in the decentralized relationship between the central and provincial governments,pollution spillovers will not have a fundamental impact on the pollution control effect of fiscal decentralization,and provincial governments can implement the central government’s ruling goals.In addition,provincial governments have some control over local air pollution,and there may be strategic imitation behaviors in environmental pollution control between provincial areas.Third,in the decentralized relationship below the provincial level,there is a clear incentive distortion between the provincial and municipal governments.At the same time,there is evidence that there are also imitations in pollution control between municipal governments.Finally,based on the conclusions obtained,this paper proposes a more realistic policy inspiration: First,we should improve the internal incentive mechanism of the government,establish an incentive system that is compatible with development goals.Second,the independence of environmental protection agencies should be enhanced.It should be allowed that the government centralize moderately in environmental matters.Third,it ought to be done that clarifying the environmental responsibility of government agencies below the provincial level.Fourth,the financial department and environmental protection agencies are supposed to build green and transparent finance,and strengthen social supervision and central supervision.