Evolutionary game analysis of the implementation of fiscal policy in resource-based cities

Jun Zhu and Linling Zhang

Resources Policy, 2022, vol. 76, issue C

Abstract: Resource-based cities cannot be transformed without reliable support from the government in the form of a suitable fiscal policy. However, when implementing such policies, local officials often resort to favoritism and enterprise rent-seeking. To ensure the appropriate implementation of fiscal policies in resource-based cities, this paper analyzed the relevant mechanisms of supervision by the central government, implementation by the local government, and enterprise participation. It explored the game-theoretic relationship among the three stakeholders to develop a stability strategy, detailing the factors influencing it. By constructing a tripartite game model and executing simulations, we found that the stable equilibrium of the game system was {supervise, fulfill duties, do not bribe} when the direct benefit to local officials was more than twice their salary. Increased supervision by the central financial department helped reduce illegal actions by local officials and enterprises. The punishment coefficient's critical value was between 7 and 8, above which local officials did not resort to favoritism. The critical value of the direct benefits was between 13 and 14. Above this threshold, local officials choose the favoritism strategy. In addition, the costs of supervision and the number of bribes have a small influence on the evolutionary path of the stability strategy of the game system. Therefore, it is important to improve supervision when implementing fiscal policy in resource-based cities and to increase penalties for violations by local officials and enterprises.

Keywords: Resource-based cities; Fiscal policy; Evolutionary game; Multi-agent simulation analysis (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420722000678
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:76:y:2022:i:c:s0301420722000678

DOI: 10.1016/j.resourpol.2022.102618

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().