Research On The Impact Of Local Tax Competition On Haze Pollution

The government work report(2019)proposed that "strengthen pollution prevention and ecological construction and vigorously promote green development",and emphasized "reform and improve related systems to promote high-quality development and ecological environmental protection in concert.Green development is an inevitable requirement for achieving high-quality development in China.Solving the problem of haze pollution and consolidating the results of the "defense of the blue sky" are the basic requirements for achieving green development.In recent years,with the continuous efforts of all parties in China,the problem of haze pollution in China has been greatly improved,but there is still a large gap with the expected goal and it cannot be ignored.In 2018,of China’s 338 prefecture-level cities and above,the number of cities with ambient air quality exceeding the standard reached 217,accounting for 64.2%,while the cities with ambient air quality standard only accounted for 35.8% of the total.Therefore,exploring the root cause of haze pollution is of vital importance to further consolidating the results of haze management in China.Based on the research of previous literature,this thesis attempts to introduce the concept of strategic environmental policy to explore the mechanism of local tax competition affecting haze pollution.Strategic environmental policy refers to the inter-regional deteriorating game behavior of local governments due to competition in the context of China’s unique fiscal decentralization.Strategic environmental policies are subdivided into strategic environmental governance investment policies and strategic environmental regulation policies.By constructing a dynamic game process,this thesis finds that local governments will decide whether to adopt a strategic environmental policy by comparing the benefits of environmental improvement and the effectiveness of capital savings(the savings are generally used for economic construction to achieve promotion purposes).Based on the haze data publicly released by Columbia University and panel data of China’s key environmental protection cities from 2009 to 2016,the impact of local tax competition on haze pollution control results will be discussed.The thesis found that under the background of limited local resources and the existing promotion mechanism,local tax competition in China has significantly aggravated haze pollution,as shown in the following:(1)The greater the local tax competition in a certain area,the more severe the haze pollution in that area;(2)The greater the local tax competition in a certain area,the greater the motivation for the implementation of strategic environmental policies in the area,that is,the lower the level of investment in environmental governance and the looser the level of environmental regulation;(3)In the context of local tax competition,strategic environmental policies have significantly increased haze pollution.Based on the above conclusions,this thesis suggests:(1)Strictly standardize the behavior of local governments,that is,strengthen supervision of local tax competition,strengthen local government’s awareness of environmental protection,and rationalize the relationship between the central and local affairs and power;(2)Cut off the transmissionmechanism of haze pollution,namely: guarantee the total environmental protection expenditure of local governments,strictly implement environmental control policies,and improve the legal and institutional framework for haze pollution control;(3)Vigorously improve the relevant government institutional arrangements,that is,establishing a diversified government assessment mechanism,alleviating the financial distress of local governments,and accelerating the pace of industrial structure reform.This thesis is divided into six parts.The introduction first explains the research background and significance of this article;secondly,it summarizes the research results in this field;secondly,it analyzes the problems and research methods that this thesis intends to explain;finally,it points out the possible innovations and deficiencies in this thesis.The first chapter is the theoretical basis of local tax competition for smog pollution.Firstly,the definitions of professional terms related to the subject of this article are introduced,including haze pollution,strategic environmental policy and local tax competition,and the research scope is clarified for the following research objects;Secondly,it introduces three major theoretical bases for local tax competition to affect haze pollution: government function theory,fiscal decentralization theory,and public goods theory.Finally,it briefly describes the mechanism of local tax competition on haze pollution.The second chapter introduces the impact of local tax competition on haze pollution in China.First,this thesis introduces the current status of local tax competition in terms of means and impact.Second,it introduces the status of haze pollution in terms of the severity of haze pollution and governance measures.While reflecting the severity of haze pollution,it also expose the shortcomings of governance;Finally,from the two perspectives of strategic environmental investment policy and strategic environmental governance policy,the current situation of strategic environmental policy is introduced.The third chapter introduces the theoretical model and impact mechanism of local tax competition on haze pollution.This section first establishes a game model of environmental policy among local governments,which extends from a static game model to a dynamic game model.It explains the "rational" local government’s choice of strategic environmental policies in the current context of "emphasizing economy and lightening environmental protection." Secondly,based on the previous theoretical analysis and game results,the mechanism of local tax competition affecting the haze is introduced,and the three most important hypotheses in this thesis are proposed.The fourth chapter is the empirical part of this thesis.This section first introduces the model setting and data description of this thesis,and then verifies the three basic hypotheses of this thesis,that is,local tax competition has exacerbated haze pollution through strategic environmental policies.The fifth chapter is the suggestion part of this thesis.Aiming at the basic research ideas and results of this thesis,in order to consolidate the achievements of China’s haze control,this thesis puts forward three practical suggestions: strictly regulate the behavior of local governments,cut off the transmission mechanism of haze pollution,and vigorously improve relevant government arrangements.