Skip to main content
SpringerLink
Log in

Research on the relationship between fiscal decentralization and environmental management efficiency under competitive pressure: evidence from China

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

Taking industrial waste gas control as an example, this study explores the impact of fiscal decentralization on the efficiency of local governments’ environmental governance under the pressure of competition, and analyzes the role of competition among local governments and support for R&D activities. The results demonstrate that fiscal decentralization can significantly promote the efficiency of local governance on control of waste gas, and this positive effect is mainly realized through the support from local government for R&D activities. As for the influence of inter-governmental competitions, only the competition in terms of governance efficiency delivers a significant U-shaped impact, and competition in expenditure scale and economy area weakly inhibits the positive influence of decentralization, meaning that the evaluation system centered on economic growth and the imitation strategy of local expenditure will not lead to a great decline in the efficiency of the use of environmental governance. Overall, this study suggests that further fiscal decentralization, emphases on government support for R&D activities, and enhanced environmental assessment in official evaluation are all the important directions for boosting the efficiency of governance.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Data availability

Data generated and/or analyzed during this research are available upon request from the corresponding author.

References

  • Acemoglu D, Johnson S, Robinson J et al (2003) Institutional causes, macroeconomic symptoms: volatility, crises and growth. J Monet Econ 50(1):49–123

    Google Scholar 

  • Andersson L, Aronsson T, Wikström M (2004) Testing for vertical fiscal externalities. Int Tax Public Financ 11(3):243–263

    Google Scholar 

  • Ang BW (1999) Is the energy intensity a less useful indicator than the carbon factor in the study of climate change? Energy Policy 27(15):943–946

    Google Scholar 

  • Angelopoulos K, Philippopoulos A, Tsionas E (2008) Does public sector efficiency matter? Revisiting the relation between fiscal size and economic growth in a world sample. Public Choice 137(1):245–278

    Google Scholar 

  • Arrow KJ (1962) Economic welfare and the allocation of resources to invention. Princeton University Press, Princeton

    Google Scholar 

  • Besley T, Case A (1995) Incumbent behavior vote-seeking, tax-setting, and yardstick competition. Am Econ Rev 85(1):25–45

    Google Scholar 

  • Blundell W, Evans MF, Stafford SL (2021) Regulating Hazardous Wastes under US Environmental Federalism: The Role of State Resources. J Environ Econ Manag 108:102464

    Google Scholar 

  • Borge LE, Falch T, Tovmo P (2008) Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation. Public Choice 136(3–4):475–495

    Google Scholar 

  • Brueckner JK (2003) Strategic interaction among governments: an overview of empirical studies. Int Reg Sci Rev 26(2):175–188

    Google Scholar 

  • Brueckner JK (2004) Fiscal decentralization with distortionary taxation: Tiebout vs. Tax Competition. Int Tax Public Financ 11(2):133–153

    Google Scholar 

  • Charnes A, Cooper WW, Rhodes E (1978) Measuring the efficiency of decision making units. Eur J Oper Res 2(6):429–444

    Google Scholar 

  • Chen Y, Ebenstein A, Greenstone M et al (2013) Evidence on the impact of sustained exposure to air pollution on life expectancy from China’s Huai River Policy. Proc Natl Acad Sci 110(32):12936–12941

    CAS  Google Scholar 

  • Cheng Z, Zhu Y (2021) The spatial effect of fiscal decentralization on haze pollution in China. Environ Sci Pollut Res 2021:1–14

    CAS  Google Scholar 

  • Christl M, Köppl-Turyna M, Kucsera D (2020) Determinants of public-sector efficiency: decentralization and fiscal rules. Kyklos 73(2):253–290

    Google Scholar 

  • Chung YH, Färe R, Grosskopf S (1997) Productivity and undesirable outputs: a directional distance function approach. J Environ Manage 51(3):229–240

    Google Scholar 

  • Chupp BA (2011) Environmental constituent interest, green electricity policies, and legislative voting. J Environ Econ Manage 62(2):254–266

    Google Scholar 

  • Coase RH (1960) The problem of social cost. In: Gopalakrishnan C (ed) Classic Papers in Natural Resource Economics. Palgrave Macmillan, London. https://doi.org/10.1057/9780230523210_6

    Chapter  Google Scholar 

  • Czarnitzki D, Licht G (2006) Additionality of Public R&D Grants in a Transition Economy. Econ Transit 14(1):101–31

    Google Scholar 

  • Da Cruz NF, Marques RC (2014) Revisiting the determinants of local government performance. Omega 44:91–103

    Google Scholar 

  • De Borger B, Kerstens K (1996) Radial and nonradial measures of technical efficiency: an empirical illustration for Belgian local governments using an FDH reference technology. J Prod Anal 7(1):41–62

    Google Scholar 

  • Fan F, Cao D, Ma N (2020) Is improvement of innovation efficiency conducive to haze governance? Empirical evidence from 283 Chinese cities. Int J Environ Res Public Health 17(17):6095

    Google Scholar 

  • Färe R, Grosskopf S, Lovell CAK et al (1989) Multilateral productivity comparisons when some outputs are undesirable: a nonparametric approach. Rev Econ Stat 90–98

  • Feng T, Du H, Lin Z et al (2020) Spatial spillover effects of environmental regulations on air pollution: evidence from urban agglomerations in China. J Environ Manag 272:110998

    CAS  Google Scholar 

  • Geys B, Heinemann F, Kalb A (2010) Voter involvement, fiscal autonomy and public sector efficiency: evidence from German municipalities. Eur J Polit Econ 26(2):265–278

    Google Scholar 

  • Giordano R, Tommasino P (2013) Public-sector efficiency and political culture. FinanzArchiv/Public Finance Analysis 289–316

  • Gordon RH (1983) An optimal taxation approach to fiscal federalism. Q J Econ 98(4):567–586

    Google Scholar 

  • Grisorio MJ, Prota F (2015) The impact of fiscal decentralization on the composition of public expenditure: panel data evidence from Italy. Reg Stud 49(12):1941–1956

    Google Scholar 

  • Gu Y, Ayala Garcia J (2021) Educational expenditure efficiency in China: the role of the governor’s characteristics. Appl Econ 53(25):2832–2847

    Google Scholar 

  • Hauptmeier S, Mittermaier F, Rincke J (2012) Fiscal competition over taxes and public inputs. Reg Sci Urban Econ 42(3):407–419

    Google Scholar 

  • Joumard I, Kongsrud PM, Nam YS, Price R (2004) Enhancing the effectiveness of public spending: experience in OECD countries. OECD Economics Department Working Papers. No.380

  • Kalb A, Geys B, Heinemann F (2012) Value for money? German local government efficiency in a comparative perspective. Appl Econ 44(2):201–218

    Google Scholar 

  • Levinson A (2003) Environmental regulatory competition: a status report and some new evidence. Natl Tax J 56(1):91–106

    Google Scholar 

  • Li C, Li G, Li Z (2019) The threshold effect of the efficiency of science and technological services on regional environmental governance in China. Growth Chang 50(3):1026–1042

    Google Scholar 

  • Managi S, Kaneko S (2006) Economic growth and the environment in China: an empirical analysis of productivity. Int J Glob Environ Issues 6(1):89–133

    Google Scholar 

  • Mao Y (2018) Decentralization, national context and environmental policy performance: a fuzzy set qualitative comparative analysis. Environ Sci Pollut Res 25(28):28471–28488

    Google Scholar 

  • Marlow ML (1988) Fiscal decentralization and government size. Public Choice 56(3):259–269

    Google Scholar 

  • Morduch J, Sandler T (1997) A Tale of Two Collectives: Sulfur Versus Nitrogen Oxides Emission Reduction in Europe. Economica 64(254):281–301

    Google Scholar 

  • Munsif R, Zubair M, Aziz A et al (2021) Industrial air emission pollution: potential sources and sustainable mitigation. Environmental Emissions. IntechOpen

  • Oates WE (1968) The theory of public finance in a federal system. Can J Econ 1(1):37–54

    Google Scholar 

  • Oates WE (1999) An essay on fiscal federalism. J Econ Lit 37(3):1120–1149

    Google Scholar 

  • Peng B, Li Y, Wei G et al (2018) Temporal and spatial differentiations in environmental governance. Int J Environ Res Public Health 15(10):2242

    Google Scholar 

  • Peter SH (2003) Who will pay? Coping with aging societies, climate change, and other long-term fiscal challenges. International Monetary Fund. WWPCEA

  • Revelli F (2003) Reaction or interaction? Spatial process identification in multi-tiered government structures. J Urban Econ 53(1):29–53

    Google Scholar 

  • Sigman H (2002) International spillovers and water quality in rivers: do countries free ride? Am Econ Rev 92(4):1152–1159

    Google Scholar 

  • Stewart RB (1977) Pyramids of sacrifice? Problems of federalism in mandating state implementation of national environmental policy. Yale Law J 86(6):1196–1272

    Google Scholar 

  • Stiglitz J (1988) Economics of the Public Sector. New York, W.W, Norton and Company

    Google Scholar 

  • Tanzi V, Schuknecht L (2000) Public Spending in the 20th Century: A Global Perspective. Cambridge University Press

  • Tiebout CM (1956) A pure theory of local expenditures. J Polit Econ 64(5):416–424

    Google Scholar 

  • Van der Kamp D, Lorentzen P, Mattingly D (2017) Racing to the bottom or to the top? Decentralization, revenue pressures, and governance reform in China. World Dev 95:164–176

    Google Scholar 

  • Willardsen K (2021) Measuring fiscal interactions in local federalism: Evidence from Florida. Pap Reg Sci 100(4):891–923

    Google Scholar 

  • Wilson JD (1999) Theories of tax competition. Natl Tax J 52(2):269–304

    Google Scholar 

  • Wright GD, Andersson KP, Gibson CC et al (2016) Decentralization can help reduce deforestation when user groups engage with local government. Proc Natl Acad Sci 113(52):14958–14963

    CAS  Google Scholar 

  • Wu M, Cao X (2021) Greening the career incentive structure for local officials in china: does less pollution increase the chances of promotion for Chinese local leaders? J Environ Econ Manag 107:102440

    Google Scholar 

  • Wu H, Li Y, Hao Y et al (2020) Environmental decentralization, local government competition, and regional green development: evidence from China. Sci Total Environ 708:135085

    CAS  Google Scholar 

  • Xia S, You D, Tang Z et al (2021) Analysis of the spatial effect of fiscal decentralization and environmental decentralization on carbon emissions under the pressure of officials’ promotion. Energies 14(7):1878

    CAS  Google Scholar 

  • Xiang Z, Ming L (2016) The Impacts of Pollution on People’s Political Attitude in China. China Econ Q 2016(4):1409–1438

    Google Scholar 

  • Xiaowei C (2018) Air pollution from industrial waste gas emissions is associated with cancer incidences in Shanghai, China. Environ Sci Pollut Res 25(13):13067–13078

    Google Scholar 

Download references

Acknowledgements

The author gives sincere thanks to Hongsheng Fang for his guidance and valuable suggestions, which have provided great help in improving the manuscript, and also thankful to the support and funding from the Zhejiang Provincial Leading Group for the Development and Planning of Philosophy and Social Sciences.

Funding

This research is funded by Zhejiang science and technology project (16NDZB01ZD), “A Study on Countermeasures of Simultaneous Development of Supply Side and Demand Side in Zhejiang’s Economic Development.”

Author information

Authors and Affiliations

  1. School of Economics, Zhejiang University, Yuhangtang Road 866, Hangzhou, 310027, China

    Mingxue Xu

Authors
  1. Mingxue Xu
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

Mingxue Xu: conceptualization, methodology, formal and empirical analysis, original draft writing, and resources.

Corresponding author

Correspondence to Mingxue Xu.

Ethics declarations

Ethical approval and consent to participate

Not applicable.

Consent to publish

Not applicable.

Competing interests

The author declares no competing interests.

Additional information

Responsible Editor: Nicholas Apergis

Publisher's note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary Information

Below is the link to the electronic supplementary material.

Supplementary file1 (DO 10 KB)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Xu, M. Research on the relationship between fiscal decentralization and environmental management efficiency under competitive pressure: evidence from China. Environ Sci Pollut Res 29, 23392–23406 (2022). https://doi.org/10.1007/s11356-021-17426-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-021-17426-1

Keywords

Search

Navigation