Multilevel Governments’ Decision-Making Process and Its Influencing Factors in Watershed Ecological Compensation

Xin Gao, Juqin Shen, Weijun He, Fuhua Sun, Zhaofang Zhang, Xin Zhang, Liang Yuan and Min An
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Xin Gao: Business School, Hohai University, Nanjing 211100, China
Juqin Shen: Business School, Hohai University, Nanjing 211100, China
Weijun He: College of Economics & Management, China Three Gorges University, Yichang 443002, China
Fuhua Sun: Business School, Hohai University, Nanjing 211100, China
Zhaofang Zhang: Business School, Hohai University, Nanjing 211100, China
Xin Zhang: International Economic &Technical Cooperation and Exchange Center, Ministry of Water Resources, Beijing 100038, China
Liang Yuan: College of Economics & Management, China Three Gorges University, Yichang 443002, China
Min An: College of Economics & Management, China Three Gorges University, Yichang 443002, China

Sustainability, 2019, vol. 11, issue 7, 1-28

Abstract: Transboundary water pollution is a long-standing problem in China, although the Chinese government has been committed to the protection of water resources. Due to the different interests of multilevel governments and the regionalization of management, there is still no unified plan to solve the transboundary water pollution in China. Watershed ecological compensation as a holistic plan to deal with transboundary water pollution is being promoted currently. Taking the South-to-North Water Transfer Project’ eastern route as an example, this paper firstly analyses stakeholders’ strategies and establishes a tripartite game model based on evolutionary game theory. Secondly, by introducing Cobb Douglas production function creatively, the supervision level of the central government is refined into supervisory attitude and supervisory skills. Thirdly, the numerical simulation is used to analyze the sensitivity of influencing factors. The results show that: (1) whether the central government supervises the local governments mainly depends on the benefits of water environment improvement and supervision costs; (2) the initial negotiation plan of the stakeholders has a significant impact on their optimum strategies; (3) the fines imposed by the central government on the local governments have a small impact on the stable state of the system; (4) the higher the eco-compensation fee, the lower their likelihood of cooperation; (5) the central government’s supervisory attitude and supervisory skills have significant effect on the sustainability of the optimum arrangement, even when willingness of upstream and downstream governments to cooperate is low; (6) the initial ecological benefits of downstream governments have no effect on the optimum strategy. Therefore, considering these insights is helpful to improve the watershed ecological compensation mechanism in order to solve transboundary water pollution and achieve the sustainability of water resources.

Keywords: transboundary water pollution; watershed ecological compensation; sustainability; water resources; South-to-North Water Transfer Project; Eastern Route; stakeholders; evolutionary game theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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